portugal property prices falling slower
News Posted On: 26 July 2011
Although the property market in Portugal remains weak, at least prices are falling more slowly, according to a report from the Royal Institution of Chartered Surveyors/CI Portuguese Housing Market Survey. Consumer confidence throughout the country remains low, and property prices of previously owned homes are falling more sharply than new developments.
Experts point out that it is not surprising that property prices are still falling, as the unemployment rate in Portugal is currently 12.4%. What makes the property market in Portugal slightly different is that increasing supply isn't depressing prices, as the main factor is less demand. This picture may change if the European Central bank continues to increase interest rates, as the majority of Portuguese mortgages are linked to short-term interest rates, and this could lead to increased pressure on some home owners who may be forced to sell.
The picture throughout the country is still somewhat mixed, as price falls have continued to accelerate in the Algarve, but have slowed in Lisbon and Porto. Out of all the regions Porto is proving to be the most resilient, although prices are still negative.
The number of new instructions to estate agents dropped in Lisbon and Porto, and remained flat in the Algarve, although the number of new instructions has been more consistent in Lisbon when compared to the other two regions.
According to some estate agents there is more activity at the luxury end of the market rather than in the lower price ranges, and this is probably due to the fact that wealthier households are more able to obtain access to finance.
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Written by Les Calvert
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