The recovery in Portugal’s residential property market is expected to continue in 2017 with estate agents and brokers predicting a rise of 30% in sales during the year.
Buyers from overseas have also been returning, according to the Portuguese Real Estate Professionals and Brokers Association (APEMIP) which says that Portugal is in a unique position to offer political and social stability to foreign investors.
Sales are being helped by lower mortgage costs with data from the National Statistics Institute (INE) showing that the interest rate on housing loans has fallen now for 13 months in a row to its lowest level since 2009.
In the Algarve, for example, Casas do Barlavento has found that around 45% of interest from abroad is coming from the UK despite Brexit, followed 24% from Sweden and 15% from France.
Portugal’s Golden Visa scheme, which offers residency to non-European Union property investors, is also proving popular with 16% of overseas buyers in this category.
‘It has been a long time for the recovery, but we are now seeing an increase in demand which is now not keeping up with supply,’ said Paul Cotterell, sales director of Casas do Barlavento.
Price are also rising. The latest INE figures show that they increased by 7.9% in the first quarter of 2017 compared with the same period in 2016. Values for new homes increased by 4.2% and for existing homes by 9.2%.
The figures also show that sales increased by 25.9% year on year to €4.3 billion and as well as the Algarve, the country’s capital city Lisbon is also seeing prices rise and sales increase.
Foreign buyers can typically get a mortgage from a Portuguese lender for about half the value of the property they are buying home, according to agents.
Buying costs, including sales taxes, land registry and stamp duty are about 7% and rental yields are also growing with some locations at 5%.