Buyer demand and transactions are increasing in Portugal, with prices rising in the Algarve and staying stable in Lisbon, latest market figures show, while ‘Golden Visa’ sales, lead by the Chinese, reach €817million
Property prices in Portugal are close to stabilising and the market has been boosted by rapidly rising ‘Golden Visa’ sales from Chinese buyers and high taxes on the wealthy in France, say experts.
New buyer enquiries increased at the fastest pace in five months, extending the 11-month run of positive demand growth, according to July’s Portuguese Housing Market Survey (PHMS).
The market has been boosted by more than €800million by Portugal’s Golden Visa property-for-residency scheme which is dominated by Chinese buyers, according to separate data, and wealthy French investors are turning to Portugal to avoid the country’s 75% taxation of millionaires.
Agreed sales have now risen for six successive months, although very marginally and this is beginning to feed through to prices, which are close to stabilising, says the PHMS.
RICS Senior Economist, Josh Miller says, “The July results again suggest that house price stabilisation may not be too far away, while the pick-up in buyer enquires, if sustained, should lead to a boost in activity going forward. Nevertheless, the recovery in the broader economy and labour market will need to be maintained for a more stable market environment to take hold.”
CI Spokesman, Ricardo Guimaraes says, “Confidence that prices may start to recover is stimulating the market, improving demand and activity. Nevertheless, for estate agents it is crucial that the financial system also remains on the road to recovery.”
The national confidence index, a composite measure of sales and price expectations, increased seven points from +6 to +13, just shy of the series high reached in April.
The Portuguese Housing Market Survey PHMS includes markets in Lisbon, Porto and the Algarve – which are all performing at different levels.
The Algarve is performing best and July marks the fourth successive month in which prices have either been unchanged or risen. Prices in Lisbon during the same time have seen minimal change while values in Porto are still falling and are expected to continue in the near future, although the pace of decline is anticipated to moderate.
The PHMS provides a qualitative monthly assessment of the sales and lettings sectors based on around 100 regular responses.
In the lettings sector, tenant demand is holding up, but new landlord instructions continue to fall. This is reducing the downward drag on rents, but they remain in decline.
Rents are expected to stabilise in the Porto and Algarve markets over the next three months, but will continue to fall in Lisbon, RICS experts believe.
Data from the Portuguese Foreign Ministry show that 1,360 ‘Golden Visas’ granted on properties worth at least €500,000 have been issued by Portuguese authorities, with around half agreed during the first seven months of 2014 alone.
In July, the scheme generated around €100million alone, out of €817million in revenue generated by the programme since its launch in October 2012.
Chinese nationals continue to dominate, with 1,101 ‘Golden Visas’ granted, followed by Russians with 43 and Brazilians 38. South Africa, Angola, Lebanon, Pakistan, India, Turkey and the Ukraine residents make up the top 10 nations.
* Rising prime property sales in Portugal are being snapped by French investors, prompted by President François Hollande 75% taxation of income above €1million, says agent Paulo Silva, from Lisbon-based agency Aguirre Newman.
“The French president’s taxes are prompting many to flee their country. “Many of these wealthy French are coming to Portugal to take advantage of tax benefits that are better than in other countries,” he tells Bloomberg Businessweek.
Nuno Durão, Head of Real Estate at Fine & Country, says, until this year, it did not sell a single house to a French buyer, but in 2014 it has closed on five properties valued at up to €1million. “The French are finally coming to Portugal. They like our country, but they like our tax regime even more.”
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By Adrian Bishop, Editor, OPP Connect
Twitter: @oppnews
