Portugal Property Market

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anotherfool

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I am considering buying a holiday home in Portugal. I have read some of the recent hype about the impending collapse of the Spanish property market, with a 30% drop in values predicted in some cases. I'd appreciate any views on the outlook for the Portuguese market and will there be a knock-on effect from the neighbouring Spanish market?

Thanks
 
The Portuguese property market is a developing one and medium term forcasts are positive. Do you have a specific area in Portugal in mind for your investment? and is it purely for a holiday home, or are you looking to get rental income out of the investment as well as capital appreciation on the property? Answering these simple questions should help you determine where in Portugal to buy. Some stats worth noting are that the Algarve Tourism Board has recently increase the amount it spends promoting the Algarve by 13% to €10 million. Average hotel and apartment occupancy in 2005 in the Algarve was 77.6% and the Algarve has 43% of all overnight stays in Portugal and 39% of the country’s tourist accommodation. That said, the Algarve itself is vast with the central Algarve being extremely expensive to purchase at present. While the relatively underdeveloped Western Algarve provides far better value for money and a truer Portuguese flavour in terms of lifestyle.

Hope this helps,
 
Sarah:

I'm not convinced of a knock-on effect. Hence my question. I have also found a house to buy! I am concerned regarding the overall supply & demand...if property prices fall in Spain, they become more attractive to potential buyers than Portugal & then Portugal gets dragged down also??? Don't know if this logic holds? I'd certainly appreciate some informed viewpoints. Thanks for reply.

Regards
 
But surely buyers realise that Spain and Portugal are different countries?! Unless people are just looking for sun and sand in which case it doesn't really matter which country you buy in. Of course price is a factor but if (say) house prices fell in England there wouldn't be an automatic knock-on effect in Ireland would there?

Sarah

www.mortgagesoverseas.com
 
http://www.daft.ie/europe/index.daft

Looking at the above page.

Spain has 4 times the pop and 4 times the area of Portugal.
There are only twice as many houses for sale in Spain. It's rough stats but there may be a story there.

When I visited the Lisbon area last September you couldn't find a half decent 3 bed within walking distance of the sea/or beach anywhere along the Lisbon coast for less than €400,000. House prices were very similar to Ireland in that there seemed to be a mad rush on prices like we had back in early 2006.

It might be worth waiting until later in the year to see how things pan out, also if there is a bargain to be got surely it must be after the summer season has finished.
 
properties on daft for less than 300,000 - I've been watching

A half decent 3 bed within walking distance of the sea/or beach anywhere along the Lisbon coast for less than €400,000.

I doubt that any are within a 30 minute walk of the beach/coast. You need that sea breeze in summer out there.
 
Yes but daft is aimed at the overseas market and *may* therefore attach a premium.......

Look at this - 250 sq m house in Sintra for €207,600;

[broken link removed]
 
Sintra is about 15 miles from the sea down the contender for the windiest road in portugal. I want to be within walking distance of the sea. I know that a view would be out of question for 400k. : all im saying is that there is no value out there at the moment. If you compare it to ire you might get the same house later in the year for the same or less money. The price rises they were/are getting are unsustainable like we have found here.
 
anotherfool said:
I have read some of the recent hype about the impending collapse of the Spanish property market, with a 30% drop in values predicted in some cases.
Click to expand...

Predictions aside, according to this article in last Sundays Mail on Sunday
Hundreds of thousands of Britons with homes in Spain have been left reeling after a price crash that has seen the value of some properties fall by as much as 65%.
Click to expand...
http://www.thisismoney.co.uk/mortgages/homesabroad/article.html?in_article_id=420094&in_page_id=505
 
The terrible story of the kidnapping will unfairly knock the tourism trade in Portugal for a period and also knock demand for holiday homes from the UK. This has shocked the UK and Portugal traditionally seen as very safe and friendly etc

Remember that the Portugese will probably cover all the coasts in concrete so be careful where you buy and also look for summer fire issues important for insurance

The prices of 300 - 400k are steep for the locals who get paid alot less than the irish.
 
Maine said:
The terrible story of the kidnapping will unfairly knock the tourism trade in Portugal for a period and also knock demand for holiday homes from the UK. This has shocked the UK and Portugal traditionally seen as very safe and friendly etc
Click to expand...

This is not going to happen...think you're going a bit OTT
 
KalEl said:
This is not going to happen...think you're going a bit OTT
Click to expand...

I have been a regular holiday visitor to Algarve for years and have regular contact with UK. This is not good news for the family tourism market in portugal which is why the local media have been understandably defensive.

I have not seen alot of growth in prices there for past 5 years but have seen alot of building much of it with poor planning.

Buy in portugal if for the long term, there will not be massive capital gains there in short to medium term. The Iberian construction boom has been built for past 5 years on low interest rates in Euro land and rising property values in UK where equity withdrawal was used to fund holiday home purchases.
 
Maine said:
I have been a regular holiday visitor to Algarve for years and have regular contact with UK. This is not good news for the family tourism market in portugal which is why the local media have been understandably defensive.
Click to expand...

What happened is truly shocking and my heart goes out to the family in question. However to suggest this will have a major impact on Portuguese tourism and its property market is in my opinion overstating things.
 
The case of the poor McCan family could well have a very affect on the Algarve market. We all know how influenced by the media we are these days and you could not get any worse sustained PR than this case. Because it is a tourist destination it is at the mercy of trends such as cancelled holidays. The case has unearthed some unsavory issues such as organized child abduction gangs operating there, corruption and criticism of the local police force. Coming at this sensitive time of the year this incident could well put a lot of families off from coming to the Algarve. If hotel bookings are then down the hotels will drop cut price rooms into the market, which will harm the yields of apartment holders even further.

There are currently 100 new tourism projects proposed in the Algarve, with the majority having approved development licenses. A recent study by Cushman & Wakefield states that 35 five star hotels will be constructed over the next five years, adding to the existing fifteen five star hotels.

The Algarve Regional Territory Regulation Plan, overseen by the Ministry of Public Works foresees an increase of 24,000 hotel beds in high-end resorts over the next 10 years outside of the existing major urban areas in the Algarve.

A further increase in the number of hotels could amplify a trend we are already seeing whereby hotels are gaining an increasing share of the tourist market. Over the last five years hotels in the Algarve have increased their market share whilst other sectors have been reduced. In 2006 hotels had 55% of night stays in the Algarve, up from 51% in 2001. In the same period apartment stays dropped by a over a quarter from over 15% of the market in 2001 with reductions every year to just over an 11% market share in 2006. With the number of hotels due to complete over the next few years the possibility of this trend continuing to harm the apartment market is very strong.

Worringly the Portugeuse government is currently reviewing its national park policy because the number of designated parks on the Algarve, and the huge size of the parks, are being criticised for harming the tourist economy because it is restricting the building of new tourist facilities. As the tourist economy is so valuable to Portugal, and the rest of the economy is a basket case, then this is a very real possibility. Hopefully they won't make the mistakes at the Costas and overdevelop but who knows.

Herein lies the rub and overseas property development is all about balancing these kinds of risks.

Geord
 
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