Portugal’s banks continue to hoard repossessed properties, releasing few onto the market.
The banking sector, keen as mustard to seize properties when the crisis hit, grabbed €5.5 billion’s worth of homes, most of them have lain empty ever since to help push house prices upwards.
One third of this property is held by Novo Banco and, eight years after the crisis bit and banks overreacted, they are now taking advantage of rising prices to drip feed properties onto the market so as not to upset the trend.
The Bank of Portugal continues to complain that there is a property bubble and the market is overheating but omits to note that the market is being influenced by the banking sector which is restricting supply and selling in an artificially created market.
The €5.53 billion of property is held by the six largest national banks - Caixa Geral de Depósitos, BCP, Novo Banco, Santander Totta, BPI and Montepio Geral.
Novo Banco’s real estate portfolio is close to €2 billion with each domestic property making up this total being the result of a repossession. This has put pressure on the lettings market as families seek rented accommodation after being evicted from homes they no longer could afford to pay for.
BCP’s portfolio reduced 6.6% year on year, Santander’s by 12%, Montepio Geral’s by 1% but State-owned Caixa Geral’s property bank managed to rise 8% to €902 million.
On average, in the first half of 2017, the value of the properties sold off by the banks was about 11.5% higher than their book value, while in the first half of 2018 the average gain was 13.8%.
Novo Banco last week announced that it would be expecting taxpayers to stump up a further €726 million as the bank writes off a further raft of non-performing loans, while sitting on saleable property assets of €2 billion.
The bank, controlled by US vulture fund, Loan Star, announced last month that it had begun selling off a portfolio of nine thousand properties valued at €700 million, most of them located in Lisbon and Porto but still requires taxpayers to fund its recovery - Portuguese style.
See: 'Taxpayers continue to fund privately owned Novo Banco'
