Historic Growth and Stability in Portugal
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Portugal has not made overnight gains to set pulses racing. Growth in prices have been seen near the coast and in sought-after locations like the Golden Triangle in the Algarve. Also the Silver Coast has seen an excellent increase from relatively low investments.
Portugal wasn’t exposed to the American Banks Sub-Prime mortgage collapse and so through 2008 and 2009 it suffered some cuts and bruises but its property market held firm. That was no surprise to us, as clients who didn’t panic saw good rental income complementing low interest rates with yields averaging around 4/5% - far more than can be currently achieved in the banking institutions.
Individual investors who bought through us and invested in several units were able to cover their costs easily and so properties didn’t go on the market and we avoided the fall out that Spain has suffered. Another important factor was the supply and demand of properties. Portugal’s planning laws forbid new construction within 500m of the sea and its bureaucratic planning process limits mass construction; as seen in Dubai.
The demand for Portugal comes from a wide breadth of segments – old and young, holidays, relocation and retirement. Its appeal is to the majority not a minority providing a large and varied base of potential clients whether they are buying or selling. So there was no panic, no sudden drop in prices and in fact, many of our investors stepped up their investment strategies.
Published in: Money