ICREA / WorldProperties.com News
Prices and transactions in decline in Portugal
January 15, 2013
The Eurozone debt crunch along with the worldwide financial crisis has taken its toll on the Portuguese property market. Housing prices and rents continue to fall, evidenced in a housing market survey conducted in November 2012 by Royal Institution of Chartered Surveyors (RICS) and Confidencial Imobiliário. The national price net balance fell from -60 to -72, meaning 72% more respondents experienced price falls rather than rises.
Residential developers reported, on the whole, less severe price declines than sales agents, suggesting that new construction homes—while still under pressure—are holding up slightly better than existing housing inventory.
Price declines are being driven by falling demand. An unemployment rate of 16.3% coupled with stringent lending conditions have resulted in a rise in the number of Portuguese nationals who can no longer make their mortgage payments. Some have put their properties up for sale and plan to rent. Real estate agents and banks are struggling to find buyers for properties, reinforcing a generally bleak outlook for the country’s housing market.
Price declines typically mean opportunity for those who have cash, including foreign buyers. Portugal moved up to the #3 spot at TheMoveChannel.com’s ranking of most popular destinations based on inquires at the site. Interest in Portuguese property rose from 9.45% to 11.38% in 2012, bumping France to fourth place at 8.31%. Topping the list was the USA, followed by Spain.