Portugal property prices to increase
Photo: rstml
Concern is mounting in Europe this week, following President Hollande's backtrack on comments that the ECB will announce a programme of quantitative easing on Thursday. The mood, though, is positive in Portugal's property industry, as prices are set to rise for the first time in years.
The latest survey from the Royal Institution of Chartered Surveyors (RICS) and Confidencial Imobiliario Sees respondents forecasting prices will rise. This increase is only marginal, but is a positive step for the market, which has seen speculation surrounding a potential bottom for months, as prices showed signs of stabilising.
At the same time, sentiment in the sales market is improving, with forward looking indicators showing rising optimism. In the lettings sector, sustained growth in occupier demand, coupled with a contraction in new landlord instructions, is helping to stabilise rents and rent expectations.
Indeed, agreed sales increased for the 12th month in a row in December 2014, while new buyer enquiries continued to rise, extending the run of uninterrupted growth in demand to almost a year and a half.
Sales expectations are now the most buoyant in four years, with the sustained recovery in activity helping to stabilise house prices, which have now remained approximately unchanged for the past eight months.
As a result of the upbeat signs, confidence is now at a record high, with the RICS/Ci national confidence index (a composite indicator of price and sales expectations) rising to 27, a new peak for the report.
In the lettings sector, occupier demand continues to rise at a steady pace and this is being accompanied by a significant fall in new landlord instructions. As a result, although still in decline, rents are falling at the slowest pace on record. Furthermore, rent expectations are pointing to a relatively stable trend over the next three months.
"We would warn against reading too much into this at the current juncture, given the still challenging economic backdrop," cautioned the RICS/Ci report.
Nonetheless, the market is well positioned for a bright 2015. On TheMoveChannel.com, Portugal was the third most popular country in December 2014, almost doubling its share of enquiries year-on-year from 3.99 per cent (December 2013) to 5.91 per cent.
Professionals are feeling confident too, with estate agency Fine & Country opening a new office in Chiado, Lisbon, at the start of next month.
The new office will specialise in marketing, promotion and sale of luxury residential and tourist real estate in the areas of Greater Lisbon and Cascais & Estoril. There will also be focus on the promotion of the Portugal Golden Residency Permit to non-EU nationals who are required to purchase a property in excess of €500,000 to qualify.
"The market has been very good for the past two years," says co-owner of the business Nuno Durão.
"This was primarily driven by the Golden Residency Permit and Portugal’s Non Habitual Residence Tax Laws that permit foreign applicants to have zero taxation on their pension and investment income. The result was €45,000,000 of sales in both 2013 and 2014."
RICS Senior Economist Josh Miller comments: "With each month that passes, we are becoming increasingly confident that the sales market has found a floor, while the lettings sector is not far behind. Whether the market can transition from a broadly stable picture, to a genuine recovery very much depends on if the economic recovery can be sustained. On this front, things look promising but we are not out of the woods just yet."