European bail out funding will actually be a positive thing for the real estate industry in Portugal, agents say. Though some believed the bail out would mean bad news, realtors agree the tourism appeal of Portugal and added airline routes will make up for projected losses. Read more about this in the full article from PropertyWire.
Real estate in Portugal offers a sound investment for those looking for overseas property despite claims that the European Union bail out will have an adverse effect on the industry, according to agents.
The bail out funding will be positive for the country, according to Stephen Anderson, managing director of Portugal based property agent Infinito Real. ‘Portugal has been an impoverished country for generations so the fact that the EU is now taking notice of this is, in many ways, a good thing,’ he said.
But industry experts are pointing out that it will have a knock on effect on the country’s real estate sector, especially in terms of national buyers. Anderson explained that he agrees with Jorge Moniz, of Banco Espirito Santo, who believes that the financial aid will affect the industry.
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‘Portugal is a recession hit country, but this does not mean that we loose our tourism appeal, a fact verified by a record number of visitors last year, and this year looks set to be no different. The beaches are still fantastic, and we are seeing more airlines adding new routes to Portugal, which helps to keep tourism unaffected. If anything, there is now more rental potential for property owners as the Portuguese, who may have been looking to buy, are waiting and are therefore looking to rent, thus increasing owners’ turnover,’ said Anderson.
He also does not believe that prices have dropped 20% this year as some have reported. ‘Prices are no longer falling and the news of a bail out has not jeopardised stabilising prices. Therefore, for investors, Portugal offers sound investment opportunities. Many clients have talked about it being a great time to buy in the UK and Ireland whilst suggesting differently for Portugal. With both the UK and Ireland experiencing their own financial problems this makes no sense as our situations are very similar,’ explained Anderson.
But prices have fallen every month this year, according to the latest report from the Royal Institution of Chartered Surveyors. The February RICS/Ci Portuguese Housing Market Survey shows that real estate sales agents are recording far sharper price falls than residential developers and the outlook for prices remains far more negative than that for sales.
According to Ci spokesman, Ricardo Guimaraes the main concerns of Portuguese real estate agents and developers relate to the financial constraints felt in the market. ‘These concerns are being amplified by higher unemployment and political uncertainty,’ he said.
But Anderson said that only affect is the mortgage rates available for non resident buyers. However, the rate is still much better than the average UK or Irish rate, and you can get loans between 3 to 4%. ‘For anyone wanting a holiday home or retirement home in Portugal, nothing much has changed. Portugal is an incredibly popular place and will always remain so. Once the bail-out is introduced and the terms set then it will be yesterday’s news, and by next year prices will more than likely start increasing again,’ he explained.
‘With a recent report that 2010 was a record year for property sales in Portugal, with 150,000 sold, there is nothing to suggest this will make things any worse than the previous two years of economic crisis, it’s more than likely affecting other EU countries more than the overseas property buyers,’ he added.
This article was republished with permission from PropertyWire.