Portugal Property Reaches Bottom of Market
Many industry insiders believe that property prices in Portugal's Algarve region have bottomed-out, meaning the only way is up for the perennially popular destination for British holiday home buyers.
With homes discounted by up to 40% on pre-crisis prices, property in the Algarve has reached a level that represents attractive value to savvy investors.
It's a good time to buy
Mike Braunholtz, director of luxury realtors Prestige Property Group said: "I've been an overseas property agent for 20 years and I've never invested in an overseas property. I've chosen Portugal this year because I think the time is right. I don't see the market going below where it is now and it's definitely beginning to go up again, so it's a good time to buy."
The Portuguese government has been actively investing in its tourism sector since 2006 when the ambitious National Strategic Plan for Tourism (PENT) was introduced. Tourism directly contributed €10.4bn to Portugal's economy in 2014 and is set to increase 3.1% to contribute €10.7bn in 2015.
As a result of PENT, tourism is currently booming in Portugal, with revenues rising, unemployment decreasing and the outlook for the country's real estate improving on the back of it.
Property at the luxury end has been buoyant for the last two years, something that is mirrored in prime real estate markets throughout the world. However, recovery has taken longer in the mainstream residential sector particularly in the Algarve, with the green shoots just beginning to appear.
Portugal showed modest house price rises during the year to Q1 2015, increasing by just 1.53% over the period, albeit a better performance than the previous year. However, despite its lacklustre performance in recent years, Portugal is very well-placed to return to growth over the short term future largely due to its commitment to expanding tourism.
Pre-crisis, the Algarve region was particularly popular with British holiday home buyers, who drove demand to such a degree that property prices inflated to the point where value opportunities became few and far between.
In 2015, it would appear that the Portuguese property market has moved back into positive price growth territory which, supported by increased investment in tourism is likely to throw out some great opportunities for savvy property buyers in Portugal.
