Estate agents in Portugal are looking forward to a busy second half of the year, after the latest RICS/Ci survey showed that confidence has returned to the market with price growth of two per cent forecast.
New buyer inquiries grew at the quickest pace in three months in May, with growth reportedly accelerating across the three regional markets of Lisbon, the Algarve and Porto, according to the RICS/Ci Portuguese Housing Market Survey. At the same time, agreed sales rose at the sharpest rate since records began in 2010 and have now improved for 15 successive months. Just as encouraging, sales expectations climbed to a fresh new high in May, exceeding the previous high watermark set back in January 2015.
“Genuine confidence appears to have returned to the market in recent months, with the recovery in both sales and prices expected to gather speed going forward,” said RICS Chief Economist Simon Rubinsohn, adding as a note of caution that “risks to the economy have not passed yet and the potential for these to derail progress should not be taken lightly.”
The Survey also revealed that near-term price expectations are stronger than at any other point in the Survey’s five-year history, with contributors to the Survey anticipating average house price rises of two per cent. Unsurprisingly, prices are expected to rise more in Lisbon and in the Algarve (around 2.5 per cent), but less in Porto (just over one per cent). Meanwhile, data from Statistics Portugal (INE) reveal that property values in Portugal began to increase again in 2014, rising 1.81 per cent in the year to March 2015.
Lisbon has long been overlooked for its potential as a rental property investment destination, but the combination of price reductions, heightened demand and competitive yields has led to a surge in investment in the city, particularly among those looking for long-term buy-to-let investments. Typical investors are looking for modern apartment properties that are perfect for professional tenants. The market is all about the added extras right now, with upscale buy-to-let properties experiencing strong demand.
“And in addition to international investors, Lisbon is attracting foreign residents, especially Chinese,” said Julian Walker at Propertyandportugal.co.uk. “The big draw for buyers from outside Europe is Portugal’s Golden Visa scheme, which gives residency to qualifying candidates. In addition to that, all foreigners – including those from within the EU – who become residents can take advantage of generous tax benefits, thanks to the country’s Non-Habitual Residents scheme.”
For British buyers, the favorable exchange rate since the start of 2015 has made buying in Portugal especially appealing. Since March, Sterling has been hovering around a seven-year high against the euro, making property in Portugal much cheaper to investors from the UK. In real terms, a €100,000 home in Portugal costs around £10,000 less than a year ago, thanks to nothing more than a weaker euro.