Property prices in Portugal are rising for the first time since the country’s economic bailout five years ago, according to the Royal Institution of Chartered Surveyors (RICS).
Portugal’s economy is also showing early indications of an overall recovery, with unemployment falling. Although the upturn in property prices is still modest, it is expected to continue at least over the next three months, with more rises as buyer demand increases and more overseas landlords and developers jump on board with investments.
Portuguese estate agents have expressed their confidence, pointing out that banks are currently prepared to lend on average 70% of the value of a property as evidence to support their positive outlook. Now seems to be a good time to invest, with two-bedroom villas near Lisbon still available for around £40,000, rising to around £130,000 for the same-size property elsewhere in the region.
However, the RICS and the estate agents both insist that buyer and seller expectations need to be realistic, and that a full economic recovery for Portugal is still not certain. In addition, the increase in property value appears to be regional, with prices rising in Lisbon and the Algarve while they remain static in the Oporto region. Rents are also still falling generally.
Josh Miller, senior economist at the RCIS, expressed a cautious optimism about the market’s long-term prospects, by saying: ‘Whether this trend can be sustained depends on the broader economic recovery. We remain optimistic on this front, but considerable risks remain.’
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