Porto “Needs Houses for Rent”

26 June 2018

The Environment Minister acknowledges that local tourist accommodations cause “disturbances” in the rental market, adding that “it is essential to grant municipalities the power to manage this phenomenon.”

The lack of housing supply worries the Environment Minister, João Pedro Matos Fernandes, who pointed to the fact that more than 26,000 Portuguese families are in a situation of housing shortage and adds that an “ever larger group of families, who cannot be called deprived, also have difficulties in accessing housing.”

The Environment Minister, speaking at the headquarters of the Association of Civil Construction and Public Works Industries (AICCOPN) in Porto, said that “there is a lack of housing for rent.” “The rental market has not grown in recent years, and local housing has upset the market,” he said, explaining that “this is not a positive or negative comment regarding local accommodation. It’s neutral information, a fact.” João Pedro Matos Fernandes believes that “it is essential to give municipalities the power to manage this phenomenon.” He acknowledged that although “most of the local housing had previously been vacant if we want to increase the rental market, and certainly do, we have to do something about it.”

Housing was ignored

Manuel Reis Campos, president of AICCOPN, stated that “it was used to be said that there was no housing problem. It was said that we had more than enough houses. Social housing was not a priority. We were assured that there was a rental market. At the same time, urban rehabilitation was just a theoretical discussion. ” For Mr Campos believes that housing requires “the adoption of a joint strategic policy, capable of viewing the urban space in its multiple dimensions,” and which “should go beyond the political cycles.”

Helena Roseta, an MP in the National Assembly and coordinator of the PS’s (Socialist Party) Parliamentary Group, noted that “housing is the shared purview of the central and local governments,” adding that the difficulty lies in the fact that “no one knows who is responsible for what.”

Regarding the New Generation of Housing Policies, the MP spoke of “a new dynamic, based on urban rehabilitation and also on the rental market,” but that it “is not yet in the State Budget.”

Deputy Roseta recalled that the Housing Law is open for public consultation until July 13. The law is being sponsored by the MP, who states that it is “essential”, “a basic housing law has long been required…”

R.U.-I.S. brand certifies qualified companies

The June 15 afternoon session was attended by IHRU President Alexandra Gesta, Professors Isabel Breda Vazquez and Paulo Conceição of the FEUP, the President of the Management Committee of the IFRRU 2020 Management Board, Abel Mascarenhas, the director of Coordination for Construction of Santander, António Fontes, partner bank of IFRRU 2020, the engineer Cristina Cardoso, of the Casa Eficiente Program, Mário Rijo, from the Caixa Geral de Depósitos, Filipe Madeira, from Millennium BCP and Vítor Hugo Peixoto, from Novo Banco, the three banks responsible for the marketing of Casa Eficiente.

An extensive panel of guests spoke in front of the nearly 500 people who filled the auditorium of AICCOPN’s headquarters and attended the ceremony delivering “Qualified Company R.U.-I.S” diplomas.

Original Story: Público

Translation: Richard Turner

Companhia Aurifícia: “Jewel” of Downtown Porto Sold to Owners of Telhabel and International Investors

27 June 2018

The property occupies 1.6 hectares in a graded block of the Rua de Álvares Cabral, in downtown Porto and is considered an “exceptional site” by the Portuguese state. On sale since 2013, the Companhia Aurifícia was finally acquired for about 10 million euros. The new owners are the brothers Pedro and Vasco Couto, the owners of Telhabel, and the investors Gonzalo Alvargonzalez Figaredo, of the Ership group, and the Swiss national Daniel Klein. The Porto City Council declined to exercise its right of preference, according to idealista/news.

According to the information from various sources in Porto’s real estate market of Porto, the company PVBRAGASINVEST, which is controlled by the owners of Talhabel and two foreign investors, acquired the shares in Companhia Aurifícia.

Pedro Couto, vice-president of Telhabel, speaking to idealista/news, confirmed the company’s acquisition of Companhia Aurifícia, stating that the process had already started “last year.”

“Aware of the value and importance of this property” to the city, the new owners intend to “preserve the legacy of the Aurifícia.” However, the executive declined to reveal any details regarding the company’s plans for the site, claiming that, at the moment, “it is undergoing a feasibility study to evaluate potential uses.”

Classified as an exceptional asset

The old nail manufacturer, which began operations in 1864 and closed its doors more than a decade ago, is considered a crown jewel of Porto’s industrial architecture. The Company Aurifícia takes up a full city block between the streets of Cedofeita, Álvares Cabral, dos Panes and the Praça da República.

The block includes a set of buildings where families that belonged to the families in the middle and upper bourgeoisie. The homes were built with prized architectural features and were enshrined as being in the Public Interest.

The recognition of the property as being exceptional was accomplished by order of the Presidency of the Council of Ministers in December 2012. The Presidential Order highlights the “exceptional legacy that represents the best preserved and coherent example of industrial Porto in the 19th and 20th centuries.”

Process stuck for years

The attempt to sell the Companhia Aurifícia has been going on for nearly a decade, especially after 2013, when the majority shareholders – Edificios Atlântico, the Pinto Leite family and BPI – agreed to sell shares in the company for approximately 10 million euros.

However, investors interested in acquiring the asset only appeared at the end of 2017, and the deal was finalised in February 2018, when a number of shares that were dispersed by several owners were acquired by the investors.

Pedro Couto stated that the investors have capital reserved for acquiring the outstanding shares but that those shares have yet to be presented to the buyers.

City council declined to exercise its pre-emptive right to acquire the property

Over the last decade, a number of parties voiced their belief that the legacy of the property should be preserved. In fact, a number of the last municipal administrations considered the possibility in their urban planning projects.

The parties conveyed the belief that the municipality should exercise its pre-emptive rights to acquire Aurifícia. However, it appears that the fact that the company was sold together with its assets would have blocked the pre-emptive acquisition.

This also seems to be the municipality’s understanding of the situation, considering a statement by the city council’s advisory office. When idealista/news asked “whether [the council] exercised its pre-emptive rights regarding the industrial property,” and the reason for its decision. The answer was that “the Municipality of Porto was not aware of the publication of a notice of sale of the building of Companhia Aurifícia, on Rua dos Bragas, which fell within the scope of the exercise of its pre-emptive rights.”

Ideas contest about the future use for Aurifícia

The Order of Architects, through the Northern Regional Section, promoted an international contest of ideas for the property in 2013.

The winning proposal came from the office of Humberto Silva and Humberto Fonseca. If put into practice, a hotel would be built where a parking lot on Cedofeita street and an artists-residence on Álvares Cabral are currently located.

In the inner perimeter, in addition to an art gallery, the huge block would be transformed into a public park, accessible by passages at the ground level of the various facilities that would be built.

The architect says he was unaware of the sale of Aurifícia, but he assumes he is available to help find a solution for new owners.

Aurifícia owns two valuable assets

The Aurifícia Company, the old nail-making factory, founded in 1864, which the majority of the people in Porto know by its beautiful brick facade on Rua dos Bragas, holds two principal assets.

The most valuable asset is the Aurifícia block, which has a total area of 88,846 m2, with 44,000 square meters (m2) of constructed area – mainly industrial buildings – and 16,000 m2 of public space.

According to the Operational Planning and Management Unit (UOPG 9), prepared by the Porto City Council, in March 2012, the free area in the inner area of the block amounts to 44,000 m2 and the buildings account for 13,000 m2.

The second asset is a 22,000-m2 plot of land for construction in Lapa, and it seems that it can be transformed into a housing project.

Mr Couto noted that the company is also “undertaking a feasibility study to evaluate potential uses for the site.”

Original Story: Idealista – Elisabete Soares

Translation: Richard Turner

Cost of Housing Makes Lisbon One of the Most Expensive Cities in the World for Living

26 June 2018

Lisbon is getting more and more expensive. In the last year, the Portuguese capital climbed 44 places in the ranking of the cost of living and is already among the 100 most expensive cities in the world to live in. The rise in the cost of housing in the area contributed to the increase. Of particular note is the cost of renting in “prime areas of Lisbon”, where a three-bedroom property already costs roughly 2,650 euros, according to Mercer’s report.

It is the largest ever recorded increase for the Portuguese capital. Lisbon climbed 44 places in the ranking, going from 137th place in 2017 to 93rd place in 2018, according to the study by the consultancy study, which was released on Tuesday, June 26th.

“The factors that are causing this increase are mainly linked to EUR/USD exchange rate fluctuations, while also reflecting a generalised increase in the cost of housing, food and fuel in the city,” the report stated.

As an example, the study compares the cost of renting a three-bedroom property in a “prime area of Lisbon,” which is around 2,650 euros per month. In Hong Kong, the most expensive city in the world, where the cost rises to 10,800 euros. The report also noted that the rental cost of a two-bedroom property stands at around 2,000 euros in Lisbon, 2,600 euros in Paris and 3,500 euros in London.

Hong Kong is the most expensive city in the world

Mercer’s 2018 Cost of Living ranking is led by Hong Kong, followed by Tokyo, Zurich, Singapore, Seoul, Luanda, Shanghai, Ndjamena, Beijing and Bern. The cheapest cities are Tashkent (209th), Tunis (208th), and Bishkek (207th).

Overall, every city in Western Europe rose in the ranking, “as a result of local currency appreciation versus the US dollar, as well as an increase in the cost of goods and services.” Zurich remains the most expensive European city, at 3rd place in the ranking. Several cities in Germany figured prominently in the report, such as Frankfurt (68th place) and Berlin (71st) jumping 49 places, while Munich (57th) climbed 41 places in the standings.

Other cities that climbed in the ranking compared to last year were Paris (34th), which climbed 28 places, Rome (46th) 34 places, Madrid (64th) 47 and Vienna (39th), climbing a total of 39 places. According to the list, cities in the United States fell in the ranking due to the recovery of the European economy, which caused a fall in the US dollar against other major currencies around the world.

The Mercer report assesses more than 375 cities worldwide and determines the comparative cost of more than 200 indicators at each location, including the cost of housing, transportation, food, clothing, household goods and entertainment.

Original Story: Idealista

Photo: Vesela Vaclavikova / Unsplash

Translation: Richard Turner

“Increased Public Investment in Infrastructure” is Crucial, FEPICOP Warns

27 June 2018

The performance of the construction sector remained positive during the first months of 2018, the Portuguese Construction Industry and Public Works Federation (FEPICOP) concluded, warning, however, of the need for increased public investment.

“The sustained recovery of the construction sector presupposes increased public investment in infrastructure, a crucial factor that is becoming increasingly relevant during public discussions of the National Investment Plan 2030 (PNI 2030),” the federation said in a statement.

According to FEPICOP, the start of the year has been promising, with employment in the construction industry growing by 0.1% in the first quarter over the same period last year, as the of unemployed workers who registered at employment centres fell by 26% year-on-year. At the same time, cement consumption grew by 2.9% in the year to May compared to the first five months of 2017.

“However, the contributions from private investment and public investment to production have turned out to be quite different, with available indicators pointing to a much more positive contribution from the private sector,” the document reads.

Disappointing public works market

The federation says that, in the private sector, the number of licensed residential homes and their construction area and non-residential building area have registered growth rates of over 38% in the first case and 9% in the second. The same is not true of the public works market, which has been “disappointing, with the value of the announcements of public works dropping by 8% in the year to May, while the total number of contracts awarded grew by less than 5% in the same period.”

According to FEPICOP, the number of new housing projects that received licensing in the year to April exceeded 6,100 (+38% y-o-y) and the area under construction amounted to 1.4 million square meters, an increase of 396,000 m2 y-o-y.

The total area licensed for the construction of non-residential buildings grew, by the end of April, 9.2% year-on-year. “The main market for licensed areas in 2018 was industrial buildings, which increased by 13% compared to the same period last year, and accounted for 40% of the total licensed area,” the federation concluded, noting that the area destined for tourist purposes registered a fall of 33%,” accounting for less than 7% of the total licensed area in the year to April 2018.”

Original Story: Idealista

Photo: Gtres

Translation: Richard Turner

Court Rules Against Tax Authority Annulling AIMI for Land for Construction

27 June 2018

The Tax Authority is now expected to eliminate the IMI surcharge tax charged on investment funds who own land that is slated for the construction of buildings to be used in commerce. The Constitutional Court will have the final word.

The arbitration courts have ruled against the tax authorities’ interpretation of the permissible application of the IMI surcharge (AIMI) on land destined for the construction of buildings for trade and services. However, the court’s decision – in favour of investment funds and a bank – is not yet final, pending an appeal to the Constitutional Court.

In 2017, there were already close to three dozen lawsuits regarding the payment of the AIMI filed at the Administrative Arbitration Centre (CAAD), where tax-related disputes are litigated. In the cases where a decision has already been made, in April, May and June, judges ruled against the application of the AIMI on land destined for the construction of buildings for trade and services, vacating any previously paid taxes.

Although these decisions were favourable to taxpayers, not everything the claimants requested of the courts were viewed favourably. The requests for the AIMI to be declared unconstitutional, as well for differential treatment for funds and financial institutions, were denied. In one of the decisions, the arbitrators stated that the perceived “illegality” in relation to the AIMI being charged on land for the construction of services “does not result from unconstitutionality but an interpretation” of tax code’s standards on the application of the tax.

The controversial surcharge, which was first levied last year, replaced the previously existing Stamp Tax on luxury real estate valued above one million euros. The new tax is now applicable to the sum of the net asset value of residential buildings and land with building permits. In the case of individual taxpayers, assets exceeding 600,000 euros (or 1.2 million for couples who are married or in civil unions and file their taxes jointly). In relation to real estate and land held by companies, a tax of 0,4% is applied on all related holdings.

The manner in which exemptions, for buildings used for commerce, services and industry, were included in the IMI code lead to misinterpretations. Dozens of investment funds and at least one bank contested the application of the AIMI on land destined for the construction of buildings for trade and services.

The tax authorities’ understanding had been the exact opposite. In a recent binding note, the tax authority stated that only “commercial”, “industrial”, “service” and “other” urban buildings and commercial buildings are excluded from taxation. As for “land for building urban buildings,” the tax authorities understand that the law makes no distinction in relation to what can be constructed, whether housing or commercial buildings and services.

Property register

Of a number of decisions by the CAAD (in which the name of the taxpayers is unknown) analysed by Público, the case of an investment fund stands out. The fund, after having paid the AIMI for a plot of land valued at 8.7 million euros (in terms of tax assets) in September, decided to contest the charge, since the land’s location coefficient was described in the property register as “services”.

That taxpayer sought to challenge the tax by arguing that the tax rule in question (Article 135b (2) of the IMI Code) should be interpreted “in the sense” that “buildings that are not intended for housing, in line with the legislative decision to exclude buildings classified as ‘commercial, industrial or for services’ from the tax,” should be exempted from the surcharge.

The arbitration court agreed with this interpretation, considering that the rule, apart from exempting urban buildings classified as intended for “services” from the tax, was also designed with the legislative intent of excluding land for the construction of such buildings. The arbitrators ruled that the tax payment must be annulled, stating that the tax authorities must return the amount paid (34,900 euros) to the investment fund together with interest counted from the date of payment.

The court stated its belief that if a literal interpretation of the law were to be adopted, i.e. if the assumption was made that all land for construction would be liable for the AIMI, that rule would be “materially unconstitutional” and would be “incompatible with the principle of equality” laid down in Article 13. ff the Constitution, “when considering taxable ownership of land for the construction of buildings for services and not ownership of the buildings built on them.”

While the courts’ rulings have been favourable in the case of land for construction that is destined for commerce and services, the opposite has occurred for land for the construction of homes. The same investment fund was the owner of land worth 9.2 million euros that was intended for the construction of housing. It also filed a lawsuit against the IMI surcharge, but this time the court ruled against the fund, stating that AIMI may be levied on residential buildings and land for the construction of residential buildings.

At the same time, the arbitration court took the view that “the specific situation of real estate investment funds, as collective investment entities holding housing assets, does not appear to deserve special treatment in relation to the majority of citizens who are individually in the same situation [as owners of housing].”

In another case, a bank challenged an AIMI payment of 117,900 euros (on assets worth 29.5 million euros) for land for the construction of industrial, commercial and service buildings. The CAAD’s decision was not what the bank was hoping. The tax authorities will only have to pay back 7,586 euros, because, like the other decision, some of these lands are intended for the construction of real estate for services and commerce. However, in relation to a number of buildings that the bank alleged were intended “for the installation and operation of the bank and the pursuit of its corporate purpose, in particular, its real estate credit business,” the arbitration court ruled against the bank.

Constitutional Court called to intervene

The tax authorities expressly requested that the Public Prosecution Service be notified of the arbitration decisions in three of the five cases in which the CAAD issued rulings, which will lead to a reassessment by the Constitutional Court. Usually, decisions by the arbitration courts are not open to challenge, but there are some exceptions. These can occur when questions are raised regarding the constitutionality of norms.

In the cases that have already been ruled upon, the requests for contestation involved amounts exceeding one million euros. The decision of the Constitutional Court in relation to the decisions already appealed is not yet known. In the other two cases already tried by the CAAD, one gave 100% reason to the claimant and another to the tax authority, but the situations evaluated evolved specific issues.

The number of arbitration awards will grow, taking into account the number of challenges that have been brought before the CAAD. The arbitration court is close to issuing rulings on another 23 cases against the AIMI. Another challenge is still at the preliminary stage. In this case, the proceedings are still being constituted, which, in cases involving sums above 60,000 euros, require the appointment of three arbitrators by the arbitration council. In a very small number of cases, one arbitrator is appointed by the arbitration council, and the two parties each nominate another.

Created in 2009, the CAAD has adjudicated 3,865 cases and issued rulings on 3,470, of which 95.8% were by arbitration. The remaining 4.2% we annulled or withdrawn. The tax value (claimed from the tax authorities) of the total number of cases filed amounts to close to 970 million euros, with cases worth 130 million euros filed in 2018, 13% of the total.

Of the decisions already issued this year, worth 97.7 million euros, 57% were favourable to taxpayers, while 43% were in favour of the tax authorities.

Original Story: Público – Pedro Crisóstomo / Rosa Soares

Photo: Nuno Ferreira Santos

Translation: Richard Turner

Owners of Portugália and British Executive Allied in Race to Acquire Herdade da Comporta

23 June 2018

Mark Holyoake, an Ibiza-based British executive, is one of the competitors in the race to buy the estate that once belonged to the Espírito Santo group. His vehicle is the Luxembourg company Oakvest Holdings.

Herdade da Comporta may fall into the hands of a controversial British executive with a conflict-filled history in the British courts. Mark Holyoake, through the Luxembourg-based company Oakvest Holdings, is one of the competitors in the race to acquire the Herdade da Comporta, having allied himself with the Carvalho Martins family, which controls the Portugália restaurant chain, according to reporting by Expresso.

PROFILE – MARK HOLYOAKE

Mark Holyoake was born in 1972, studied at the University of Reading and entered the real estate business in the 1990s. He founded Oakvest in London in 2006, focusing on buying, developing and managing residential and commercial real estate in the UK. One of his biggest projects was the Grosvenor Gardens House building. Holyoake also invested in the Icelandic fish company Iceland Seafood International. The executive, who has several of his investments in holding companies in Luxembourg, lives in Ibiza, in a house he acquired for more than €10 million in 2013. Mr Holyoake has no history of investments in Portugal. He guarantees that he does not know either Ricardo Salgado or the Espírito Santo family, the former owners of the Comporta Estate.

The consortium formed by Mark Holyoake and the Carvalho Martins family also has the support of a Spanish company called Sabina Estates, which operates mainly in the real estate market in Ibiza. The consortium is vying to purchase the Herdade da Comporta, competing against other major investors, including the French billionaire Louis-Albert de Broglie and a partnership between Paula Amorim and the Frenchman Claude Berda.

Contacted by Expresso, Holyoake declined to reveal how much he is offering for the Herdade da Comporta or any details of his plans for the property. He limited himself to stating that he has comfort letters issued by two banks attesting to his financial capacity to compete for one of the Espírito Santo family’s main non-financial assets. “No bank guarantees were requested in this process,” Mr Holyoake stated. The comfort letters are from an Icelandic bank and a Luxembourg bank, neither of which could be identified.

Holyoake’s offer by Comporta is non-binding. A source close to the British entrepreneur assured Expresso that none of the other proposals (neither Berda’s with Paula Amorim nor Louis-Albert de Broglie’s) is binding since final and binding offers will only be formulated after an evaluation of the proposals by the fund that owns the Herdade da Comporta.

According to reporting by Expresso, several stakeholders in the process have doubts about Holyoake’s proposal through Oakvest, suggesting that the British executive, who has not previously invested in Portugal, is indirectly associated with the Espírito Santo family. Holyoake denies any relationship. “I had never heard anything about Mr Ricardo Salgado until recently, and I never met him, or have I done any business or had any contact with him,” the executive assured Expresso. Holyoake says the same holds true Espírito Santo family. “Our offer is independent and is by no means tied to the past, which is clearly a good point,” he added. Holyoake declined to elaborate on his offer, as opposed to disclosures by his competitors.

Louis-Albert de Broglie spoke with Expresso last week, saying that he intends to transform the Herdade da Comporta into a “laboratory for ecological production, biodiversity and culture” without replicating the problems with excessive construction that have occurred, for example, in the Algarve. Broglie expects to develop just 15% of the Espírito Santo Group’s (GES) plans for the two areas of Comporta that are on sale (one has 365 hectares and the other 551 hectares). The French billionaire plans to build five villas in a 15-hectare area where a 486-flat apart-hotel had been planned. Broglie also plans on building one hundred residences in an area where GES had intended to build ten times that figure. The Frenchman also noted his plans to create 30 organic farms in an area that had been slated to receive 1,500 homes.

NUMBERS

2 banks in Iceland and Luxembourg have issued comfort letters to support Mark Holyoake’s bid to acquire the Herdade de Comporta

150 million euros – the figure Holyoake claimed in a lawsuit against the brothers Nick and Christian Candy, his former business partners. Holyoake lost.

1360 hectares –  the area that Claude Berda and Paula Amorim want to acquire in Herdade da Comporta. Mark Holyoake has not revealed his plans for the area.

15 per cent of the Espírito Santo Group’s original project: the billionaire Louis-Albert Broglie proposes to limit construction to a small part of the Herdade da Comporta

Claude Berda, through Vanguard Properties, also has, in partnership with the entrepreneur Paula Amorim, a proposal for the Herdade da Comporta, which includes the acquisition of 1,360 hectares of land, completing the golf course that is already under development and creating a new concept hotel with the brand JNCQuoi, together with the architect Lazaro Rosa Violan. Vanguard already has another real estate project near the Herdade da Comporta, called Muda Reserve. Vanguard also declined to reveal the size of its bid to acquire the property.

Secrets are, as the saying goes, the soul of business. What is no secret, at least in England, is that Mark Holyoake is a controversial figure, involved in various lawsuits and litigation with creditors. One of his most important battles played out in England between 2015 and 2017. Holyoake filed a complaint against the brothers Nick and Christian Candy, two real estate magnates that Holyoake had worked with before.

In his lawsuit, Mark Holyoake claimed damages of £132m (€150m), stating that he was a victim of racketeering, blackmail and fraud. “The lawsuit was linked to a luxury real estate project in London that was one of our projects at the time,” the British entrepreneur recalled, noting that the judge has accepted several claims against the defendants (the Candy brothers). However, what stands out from the lawsuit, which was decided in December 2017, is that the judge accused Mark Holyoake of lying. Holyoake defended himself by saying that the judge’s comment was directed both at himself and the Candy brothers. The judge said, “both sides have been willing to lie because of their business needs,” Mark Holyoake argued.

The court also added that Holyoake had misled one of his lenders as to the origin of the funds used to acquire the London-based venture Grosvenor Gardens House. The executive who is now competing to acquire Comporta suffered a new setback last week when he was denied the possibility of appealing December’s ruling. Expresso questioned Mr Holyoake as to the lawsuit’s cost. The executive explained that the attempted appeal alone would cost £75,000. “All other costs were paid some time ago, and we were fully covered by Munich RE, Europe’s largest insurer,” Holyoake said.

In the past, Mr Holyoake has also been the focus of litigation tied to the collapse of the British Seafood Group, in a case in which the executive was accused of fraud.

His Portuguese partners are more discreet. The Carvalho Martins family is the main shareholder of Portugália Investimentos, which has more than €100 million in capital and controls the Portugália restaurants, as well as having a stake in several real estate projects, the Jayme da Costa’s company and the Pinto Basto group, among others.

Original Story: Expresso – João Vieira Pereira / Miguel Prado

Photo: Maurício Abreu

Translation: Richard Turner

Sales of Homes Fall by 4.1% in First Quarter as Prices Continue to Rise

25 June 2018

Housing prices are continuing to soar in Portugal – up 12.2% year-on-year and 3.7% quarter-on-quarter – but fewer properties are being sold. In the first quarter of the year, 40,716 houses were traded, 15.7% more than in the same period of last year, but 4.1% less than in the previous three months (October to December 2017).

“Between the last quarter of 2017 and the first quarter of 2018, housing sales fell by 4.1%, the first quarterly reduction in the number of transactions since the third quarter of 2016,” the National Statistics Institute (INE) reported.

According to the institute, between January and March, 40,716 homes were sold, 15.7% more than in the first three months of last year. Of these, 34,822 were previously existing homes, 18% more than in the same period of the previous year. The sale of new housing accounted for 14.5% of the total, “totalling 5,894 units, an increase of 4% over the first three months of 2017.”

However, sales declined by 4.1% on a quarterly basis, as mentioned above. “By segment, the new housing market registered the biggest fall (-8%, compared to -3.4% in existing housing),” the INE stated.

Lower quarterly sales and less revenue

The total value of transactions surpassed 5.4 billion euros in the first quarter, up by 25.7% y-o-y. Sales of just existing homes exceeded 4.4 billion euros. In quarterly terms, compared to the last three months of last year, the value of sales fell by 2.8%, or by roughly 200 million euros.

“Although both segments had a reduction in the value of transactions, the fall was more intense in the case of new housing (-5.6%) than in existing housing (-2.1%),” the INE’s note read.

Yes, buying a home is becoming more expensive

On the upside, literally, housing prices continued their climb, as it becomes increasingly expensive to buy property in the country. INE’s data are enlightening: housing prices by increased by 12.2% in one year, from the first quarter of 2018 to the first three months of 2017,” the highest rate of change in the series, which began in 2009.”

“Existing homes saw an increased the pace of price growth for the third consecutive quarter, reaching 13% in the first three months of the year (11.8% in the fourth quarter of 2017). For new housing, the rate of change (+9.7%) was the highest in the series, increasing by 3.8% compared to the previous quarter,” the INE added.

In quarterly terms, compared to the last three months of last year, housing prices increased by 3.7%, 2.5% more than in the previous quarter. “Price acceleration was more intense in the case of new housing, with a variation of +4.4%. In existing housing, the rate of change was 3.6%,” the institute reported.

AML and North Region highlighted

By geographical area, the Metropolitan Area of Lisbon (AML) and the North region accounted for 65% of the total number of houses sold, the highest rate recorded in the last two years.

“AML reached 14,548 sales and (…) the North region again exceeded 11,000 transactions. With a total of 3,920 transactions, the Algarve was the only other region that increased its relative importance in total sales (by 0.1 pp) in the country,” the INE stated.

It should be noted that the AML and the North region accounted for 71.8% of the value of the transactions carried out in the first three months of 2018, a new high. Another relevant fact is that the North region reached 1.3 billion euros in sales in a single quarter, which is also a new high. The AML registered 2.6 billion euros.

Finally, the largest increases in the number of home sales occurred in the AML, the Algarve and North regions: 17.5%, 16.3% and 16.2%, respectively. The Autonomous Region of the Azores was the only region to suffer a fall (4.9%).

Original Story: Idealista

Photo: Creative Commons

Translation: Richard Turner

Costa Warns of Risks from Tourism: the Gov’t Will Provide €2.4 Billion to Boost Rental Market

23 June 2018

“We cannot permit the growth of tourism to transform our cities into amusement parks for adults.”

Portugal’s prime minister stated that the National Assembly is preparing a package of “tax incentives” that will help private individuals offer their properties at “more affordable rents and for long-term contracts.” António Costa was speaking in Vila Nova de Gaia at the inauguration of a new public square.

The head of Portugal’s government stated that two urban rehabilitation programs essentially have the same purpose: to foster “affordable” rents. Together their funding amounts to 2.4 billion euros. The funding consists of “a €1-billion line of credit with the European Investment Bank” and a “new €1.4-billion financial instrument, aimed exclusively at abandoned properties owned by the central government and the municipalities.”

“The measures do not seek to restrict tourism; they are intended to increase the rental market for residents. Otherwise, tourists will not come. They come when the cities are alive. This only happens while they are seen as being authentic. [That authenticity] is provided by people who live there, not by visitors,” he told reporters.

Prime Minister Costa believes that it is necessary that “some of the existing supply for tourism must be added to the rental market for affordable housing for the middle class.”

“We have, within the scope of the new generation of housing policies, a bill in the National Assembly that has an important set of tax incentives that seek to incentivise more affordable rents and longer-term contracts,” he said, noting that the State has “worked hand-in-hand with local authorities.”

The prime minister explained that they are targeting rents that “do not involve an effort rate exceeding one-third of household income and have an average discount of 20% to the rental market rate in the corresponding area.”

Original Story: Jornal Expresso / Lusa

Photo: José Sena Goulão / Lusa

Translation: Richard Turner

Government Grants an Additional €5MM to Tourism Projects in Portugal’s Interior

25 June 2018

The Secretary of State for Tourism, Ana Mendes Godinho, announced that the Government has made another five million euros available to finance tourism projects in the interior through the Valorizar program.

During a visit to the municipality of Castelo de Vide last Friday, the Secretary of State said that the project was “a special one under the Valorizar program, which includes the Jewish route, wine tourism and equestrian and military tourism in the interior.” Ana Mendes Godinho noted that the program’s rate of execution has been high and that, at this moment, the difficulty lies “in finding a way to respond to the high-level of requests coming in. “In a statement, the Portuguese government stated that the Tourism Valuation Support Line for the Interior has been the target of enormous demand. Created at the end of 2016, the funding line received more than 500 applications. 155 were approved, with an associated total investment of 60 million euros and incentives of 40 million euros. The minister also indicated that the support, which is specifically directed at low-density areas, was scheduled to end on June 30. However, given the program’s positive contribution and the excellent results achieved in the projects under development in these regions, the government decided to maintain the program active by launching specific competitions. The Secretary of State added that Alentejo is the tourist destination that is showing the greatest growth in 2018, due to the region’s “rediscovery” by visitors. “The challenge is not to rest on our laurels. The moment is so good that we need to redouble our efforts,” she said.

Original Story: Diário Imobiliário

Translation: Richard Turner