Algarve turns to auctions
Along with Spain and Ireland, Portugal was one of the first countries to be hit by the ongoing economic woes in the Eurozone.
As with every other country that has suffered economic setbacks in recent years, Portugal’s property market has taken some hard knocks and seen significant falls in property prices.
Across the whole country values have plummeted and transaction volumes decreased. This has not only been due to domestic buyers finding it hard to borrow funds but also because overseas investors have been wary of ploughing money into depreciating assets.
However, there are now signs that the property market in Portugal is recovering from the recession according to the Royal Institution of Chartered Surveyors, as historically low prices begin to tempt foreign buyers back.
So called ‘residential tourism’ accounts for around 9% of the country’s GDP so getting the property market moving again plays a large part in the plans for national economic recovery. Along with several other European states, Portugal has recently introduced a visa enticement to stimulate overseas interest.
The ‘golden visa’ scheme is aimed at encouraging transactions from non-EU buyers by offering opportunities to become a resident in Portugal and subsequently be able to travel freely around Europe. Anyone buying a property worth €500,000 is eligible.
However, at the moment it is British buyers who make up the bulk of foreign purchases, closely followed by Scandinavians who have the advantage of their own strong currency against a weak euro.
Away from governmental level, agents and sellers are also taking actions to help move things along. Auctions of properties are becoming common and give buyers a chance to invest in “one of the most sophisticated residential and tourist resorts in Europe,” according to auctioneer Rhett Winchell, President of KW Auction Group.
If you are looking to invest in Portugal, think carefully about how you will be transferring money abroad. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.