The Portuguese real estate market has been through a crisis for the last three years. The shortfall of bank credit has deeply affected transactions, and prices have dropped. For those having liquidity, it has never been easier to close a deal.
The selling prices of property goods have dropped by 25% in 2012, relative to the 2008 national average. Falling prices and large stock of properties for sale are not happening evenly in every region. Meanwhile, 2013 data suggest a significant market recover in the main cities.
Check out our hints on the best market opportunities at this moment:
Lisbon is still one of the most dynamic spots in Portugal and the city that best resists market fluctuations. The price decrease between 2008 and 2012 was not higher than 10% (comparing to the country average of 25%). Thus, for instance, a 100-sq.m apartment that used to be sold by 320.000 euros can now be acquired by 265.000 euros.
Being the administrative capital and the economic engine of the country, it attracts most of the national and international investors, it is important to mention the increasing presence of Russian, Brazilian and Chinese, as well as Europeans.
Developed infrastructures and airline connections, together with its historical charm, as it is still a modern and cosmopolitan city, Lisbon has positioned itself as an interesting place to live. The average price vary between 3.000 and 4.000 per sq. meter in the most privileged areas of the city, which is much lower than in other European capitals.
The rental market turned out to be remarkably active since the financial crisis, since mortgage credit has been out of reach to most Portuguese families. Seasonal rentals have expanded in number in the last years as well, due to the city tourism attractiveness. To give an idea, the rental market represented 6% of the property transactions in 2008 and nowadays comes close to 60%.
The Algarve is a centre of strong urban activity. The British are the main buyers in this region, both for holiday and permanent residence to enjoy their retirement. When their own country was facing a crisis, investing in property in the Algarve protected their assets. Although the average prices per sq. meter and the sales volume have decreased significantly over the last four years, this will definitely be the most dynamic region when the market recovers, which positions the Algarve as a strong opportunity for investment. A three-bedroom apartment may cost around 18.000 euros and three-bedroom villa 350.000 euros.