Portugal feeling positive over improving economy
Property prices are now rising in Porto for the first time in four years Photo: Danicuki
Portugal's property industry is feeling positive about the year ahead, as its economy continues to improve. The IMF upgraded its forecast for growth in 2015, with agents beginning to put the bailout behind them.
The country exited its bailout agreement in May 2014, as Portugal's economy began to grow. Minister of state and finance Maria Luis Albuquerque has since hailed the bailout as a success, noting the country's improving prospects.
The positive mood was backed up this week by the International Monetary Fund (IMF)m which upgraded its forecast from 1.2 per cent growth in 2015 and 1.3 per cent in 2016 to 1.6 per cent and 1.5 per cent respectively.
"When we look at the core of the program and the objectives that the program had, we can say it has been successful," says Chris White, founding director of boutique estate agency Ideal Homes Portugal.
"Obviously Portugal has gone through some tough times, but the country has worked hard to put the bailout money to good use and has turned its fortunes around over the past four to five years. It has been a struggle at times, with austerity measures impacting deeply on the people's psyche as well as their pockets, but the results of that effort are now beginning to become clear."
Demand from overseas buyers has helped to drive the market's gradual recovery, with interest from non-EU buyers encouraged by the country's popular Golden Visa schemes. Ideal Homes also highlights British buyers as particularly active in the market, boosted by the appeal of the weak euro against the strong pound.
The Organisation for Economic Cooperation and Development is now even more bullish in its forecasts for Portugal, projecting gross domestic product growth of “close to 2 per cent in 2016.”
The IMF's report, though, cautions that the outlook is still clouded by old problems, such as unemployment.
"Unemployment is still fairly high," says White, "but the huge spike in employment that the summer season brings – particularly in regions like the Algarve – should mean it ends the year lower than it started. Certainly in terms of the housing market we can feel the quiet new confidence that the country is emanating."
Indeed, the RICS/Ci market report for February 2015 found the national confidence index among property professionals had reached a fresh record high, fuelled by property sales and prices rising for the second month in a row.
"Property transactions are on the up," comments White. "Though buyers are more cautious than they used to be the market is definitely reviving nicely.