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A Paradise for the French Is Getting More Expensive
15 August 2017
Property values have skyrocketed while the rental market is at a standstill
The end of the crisis has been declared and increases in demand are causing property prices to take off in Setubal.
Real estate brokers see the increase “as the result of the enormous visibility that the city has enjoyed over the last year and a half,” says Sandra Branco, a salesperson at Remax, which has “interested buyers but very few available properties.”
Fernão Trovão, a manager at Century 21 in Setubal, expects price increases of between 10% and 15%. And that might not be the end of it. Real estate is only currently accessible “to those who have money, because banks haven’t loosened credit to the extend seen before the crisis.”
Those who do buy usually do not do so using bank financing. Interested buyers are arriving from all over. Besides the Portuguese, they are mostly from France, Brazil and Switzerland.
The president of the Setúbal city council, Maria das Dores Meira, says that there are already more than 800 French, Belgian and even Norwegian and Danish nationals living in the city.
“It is one of the places French retirees like to choose, for second homes or just vacation homes. The also they buy and rent properties to their friends from home, to generate more income,” says Henrique Martins, the commercial director for Era in Setúbal.
There are buildings and apartments to suit all tastes. A three-story low-rise building for renovation can still go for only €80,000. The renovated buildings are used for primary or secondary residences. Maybe that’s why there is “a brutal crisis affecting rentals. There are none,” says the manager of Century 21.
There is nothing on the market to rent or new developments to buy. The few new developments that had halted during the crisis have been taken up again and have almost been completely sold, the brokers insisted.
Even so, Era’s commercial director says that there are plenty of young people looking to live in the municipality of Setúbal. “There is a lot of business being done that has nothing to do with renovations [almost 50% of the business that is done today].”
Sandra Branco also laments: “Unfortunately there is barely any new construction underway these days. The market is living on transactions done on existing properties, and rental transactions are insignificant.”
Maria das Dores Meira wants the city council to continue to set an example and buy more buildings in the centre of town, which can then be rented out, especially to young people, but prices are already high. “During the crisis properties were extremely cheap and we could get what we wanted. But prices have skyrocketed. ”
Original Story: Expresso – Alda Martins
Translation: Richard Turner