Lisbon’s Expo area already has seen property prices above pre-crisis levels at over €6,000 per square meter. In downtown Oporto there has been a 60% rise in prices since 2009.
In the Algarve, prices also are more expensive, partly due to "strong demand from the British and French, thanks to tax incentives" offered by the government.
The reality for the rest of the country is quite different.
The price of properties in hotspots has been driven by foreign investors but Portugal’s association of real estate companies APEMIP, say that in the rest of the country supply outstrips demand with a consequent affect on prices.
"In some areas of Lisbon and Oporto this year, house price rises have been excessive," according to the president of AEMIP, Luís Lima.
"In the Expo area for example there has been a high demand by foreign, mainly Chinese, buyers wanting to obtain a Golden Visa. In downtown Oporto, prices are so high that it is dangerous for the market."
The recovery began in 2013, intensified in 2014 and continued through 2015.
Ricardo Sousa, president of Century 21, says that in 2010 and 2011 "much of the market was from the banks selling repossessions and houses that had been returned by customers. This was in the medium to medium-low segment with houses pitched at €140,000, selling for €90,000."
Over the next two years everything changed, "with foreign demand affecting the market," but the volumes are far from the boom years with 231,000 properties sold in 2005 and just 90,800 sold in 2012.
"Apart from in the big cities, the suburbs have not seen price rises. In these areas supply exceeds demand," said Lima who predicted, "in many areas of excess stock, land use will have to be rethought as not everywhere can be built on, as was thought before the crisis. Many already completed buildings will be demolished,"
As for 2016, Lima’s expectation is that house prices may appreciate a little, following an expected increase in demand and better credit availability from banks.
Some pundits see the emergence of a serious ‘buy to let’ market in Portugal as prices are low and yields are around 4-5%, but fundamental to the market is that the government keeps tax incentives for foreign investors which discriminate against local residents, a stance the Socialists have yet to confirm as continuing policy.
