Algarve property sees increase in confidence
Portugal has been one of the countries hardest hit by the economic crisis in the eurozone, but it has had less media coverage than recent events in Greece, Cyprus and Spain.
This doesn’t mean that confidence in the property market has escaped unscathed, with overseas buyers in particular unwilling to continue investments along the lines of levels previously achieved.
However, things look like they may have reached a turning point as property agents in the Algarve are reporting an increase in confidence in their market.
According to the latest RICS/Ci market survey, transactions are showing signs of stabilising and the outlook for sales expectations are positive for the first time since 2010.
Lower prices and a general feeling amongst buyers that the worst is over are given as the reasons for the changes, but the report does have some words of caution.
Whilst suggesting that there are “more grounds for interpreting the current trend in the data as something more than noise”, the report also goes on to “caution against concluding, at least at this stage, the sales market has turned a corner”.
Prices across the country continue to fall but the national confidence index, a figure based on price and sales expectations, is still negative.
Josh Miller, RICS Senior Economist, said: “The April survey results point to further early signs of stabilisation in the sales market. However, prices are still falling and the broader economic backdrop remains very weak, with unemployment at 17.5%. Meanwhile, activity in the lettings market appears to have run out of momentum.”
Although the rental and lettings sector has been reaping the benefit of a slowdown in the sales market due to the lack of availability of mortgages for domestic residents, tenant demand has stalled and the volume of lettings transactions is at its slowest since October 2011.
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