Portugal is now a buyer’s market, according to new figures. Official data released at the end of 2013 shows that bank valuations of Algarve property have consistently fallen since 2008, with low prices making now the time to consider buying Portuguese real estate.
The “unprecendented” low prices have prompted speculation that the market will reach the bottom at the end of 2014 before recovery sets in. Bank valuations from Statistics Portugal (INE) were analysed by property portal Meravista, comparing the figures to its own database of listings in the Algarve. The site found that house prices in the popular coastal region were only 5 per cent higher than the bank valuation (of €1,298 per square metre).
Meravista highlighted Portimão and Olhão as key hotspots for bargain hunting investors, with true property values lower than bank valuations in December 2013, alongside other sought-after seaside areas Albufeira and Lagos, where prices are below the regional average. Meravista argues that the undercutting of bank valuations by sellers and agents indicates the market has reached a low point ahead of a projected turnaround. Indeed, the RICS/Ci Portuguese Housing Market Survey also signals positive times in the future. Sales ativity rose in December 2013 for the second month in a row, albeit marginally, and is expected to rise further “in the near term”. Property prices continue to decrease, but at the slowest pace in the survey’s history, suggesting that the market is stabilising near a bottom.
The national confidence index also remained positive, found RICS/Ci, again for the second month in a row. The index stood at 6, the best reading since the survey was launched in 2010 and only the third time a positive reading has been recorded. Anita van Huson, co-founder of Meravista, comments: “Algarve property was experiencing inflated growth in advance of the recession, so it was hit particularly hard when the markets crashed. I don’t think we’ll see valuations as low as these for a long time to come, which makes the Algarve an ideal place for property investment.”
Portugal has consistently remained a popular destination with buyers on TheMoveChannel.com, attracting 10 per cent of all enquiries on the site in December 2013. Indeed, the country’s lifestyle appeal remains strong, with Yahoo! Finance ranking Portugal as the second best place to retire in the world, above Barbados and Spain and behind only Malta.