In spite of Portugal’s property prices hitting rock bottom in the market, investment in the country’s real estate is at record levels. The ‘Golden Visa’ scheme launched by Portugal has given the country’s economy a significant boost.
The national confidence index saw an increase of 10 points and is now at 23, the highest reading on record by some margin, Sales expectations are also the most buoyant since the survey was launched by the Royal Institution of Chartered Surveyors (RICS) in 2010.
The main cause behind the boost in Portugal’s property market has been the increasing foreign demand, especially from non-EU investors. This has brought high transaction growth and stabilization of house prices.
In August this year, the volume of new buyer enquiries rose notably, with the market demand rising consistently every month since last year. According to a survey of 100 industry professionals covering Porto, Lisbon, the Algarve, agreed sales also went up in August.
According to Ricardo Guimaraes, RICS spokesman, “Agents clearly associate the market recovery with foreign demand, linked to the Golden Visa and non-habitual resident programs. These legal and fiscal measures have been critical in changing the trend in the market. The general economic stabilization is also contributing to the improving outlook.”
The price of housing in Portugal remained almost unchanged in August and experts say that they expect the trend to continue in the next three months. The developers are forecasting better market conditions across all regions covered in the survey.
Rents in Portugal continue to decline in spite of increasing tenant demand and falling landlord instructions.
According to Josh Miller, RICS’ senior economist, the improving economy and job situation will further boost the demand for property in Portugal. “The August survey confirms that a more stable price picture is emerging, while the pick-up in activity indicators should provide further support.”
“Unemployment has seen a meaningful decline over the past year, but remains elevated. Therefore a sustained improvement in both the labor market and broader economy will be essential to any possible turnaround in the housing market.”
Portugal’s Golden Visa scheme gives residency visas to non-EU investors, once they make a qualifying real estate purchase. As per data from the Portuguese Foreign Ministry, 1,360 Golden Visas have been granted to investors, half of which had been finalized within the first seven months of 2014 alone.
In July, the Golden Visa scheme generated around €100 million, which amounts to 1/8th of the €817 million generated by the program ever since it was launched in October 2012.
Most of the visas were given to Chinese nationals (1,101), followed by Russians (43), and Brazilians (38). South Africa, Pakistan, Angola, Lebanon, India, Ukraine and Turkey also made up to the list of top 10 nations obtaining residency in Portugal.
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