15 December 2016 – El Mundo
After several years in crisis, the Portuguese real estate market is booming once again thanks to public auctions of properties and the arrival of overseas buyers, attracted by the tax exemptions and the quality of life.
In Lisbon, Luis Morais, a 43-year old IT teacher, has just acquired an 80 m2 apartment in Sintra, a city close to the capital, for €49,000 in a public auction. The bidding started at €33,000. “It is a bargain” said the IT teacher. “We are not going to live there, we just want to rent out the apartment to supplement our income”, explained Teresa, his partner, aged 36, who teaches mathematics.
The property was confiscated from a family with lots of debt and was owned by the public bank Caixa Geral de Depositos, which decided to auction it off. Like Luis and Teresa, many Portugese people are now choosing to invest in property rather than leave their money in the banks, which are still fragile following the crisis.
Overseas investors are also buying properties in public auctions, such as the case of a three-storey office building in the entre of Lisbon, which was put on the market for €5.1 million.
From recession to recovery
After several years of crisis, the real estate market in Portugal began to improve in 2013 and the recovery accelerated in 2015, thanks to low interest rates, which drove up sales by 27%. Between 2008 and 2012, house prices fell by 30% in Portugal, but they are now soaring again thanks to overseas buyers, attracted by the quality of life in Portugal and the tax exemptions on offer.
The phenomenon is being felt in Lisbon above all. “In two years, prices have risen by 20% and they are still increasing, there is still room for growth” said Pascal Gonçalves, President of Libertas, a property developer.
Recently, a 160 m2 apartment in the popular neighbourhood of Alfama was sold for €420,000, which is twice as much as it was worth ten years ago. And in the heart of the capital, in the neighbourhood of Chiado, a 100 m2 2-bedroom home was recently sold for €900,000, a price that would have seemed very high just a few years ago.
No risk of a bubble
In Oporto, the largest city in the north of the country, the real estate sector is also performing well. “I have doubled my turnover in a year, and I now earn four times as much as when I worked as a biologist”, explained Isabel Leitao, aged 33, who has been working as an estate agent for six years.
During the first nine months of 2016, the activity of the network of real estate agents Century 21 has soared by 36%. Its President for the Iberian Peninsula, Ricardo Sousa, expects “prices to stabilise in Lisbon because they are out of step with the incomes of Portuguese people”.
Nevertheless, according to the Minister for the Economy, Manuel Caldeira Cabral, there is no risk of a real estate bubble. “Prices have increased in Lisbon, but they are still much lower than in Paris or London”.
The average price of an apartment in Lisbon has increased to €3,607/m2, according to the ad website Imovirtual. (…).
Original story: El Mundo
Translation: Carmel Drake