Portugal is on the overseas property news again. This time it is about the increase in property prices, as well as the rental income that owners can achieve. Overall growth is expected to be in the region of 4.5% in the coming year, and averaging 5.5% over the next five years.
Nationally, property prices rose by 12.8% in 2017, and by 21% in Lisbon. Real estate experts are also suggesting that buyers keep an eye on Porto for strong growth and the Algarve, always a popular destination, is also expected to perform extremely well. These are important points for overseas investors, and of course it suggests that getting into the Portuguese property market sooner rather than later is advisable.
Demand is outstripping supply in Portugal
This is the key reason to invest in Portugal – demand exceeds supply right now. So, property prices and rents are inevitably going up. Also, it seems that more owners are holding on to their properties here, clearly in anticipation that selling at a later date will give them a bigger profit. Therefore, more new build properties are needed to meet demand. An annual report by RICS/Ci Portugal, also revealed “that house price inflation picked up in the latest figures, with the price growth gauge displaying a net balance of +52%, of which is the second strongest reading since 2010, when the survey began.”
Ricardo Guimaraes of Ci said: ‘Top markets see new records every quarter and the most expensive prices previously have become just averages in the present. These quick changes have raised concerns for some respondents about developers and buyers operating in secondary locations, where prices might become unaffordable relative to local rationales.”
With Portugal’s economy also seeing positive growth compared with the past, it’s fast becoming one of Europe’s top property investment locations. Simon Rubinsohn, chief economist at RICS, said: “Indeed, employment and household incomes are rising, consumer confidence remains elevated, and credit conditions have eased further over recent months. Given this, the outlook for housing market activity appears solid as we move through 2018.”
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