Fall in demand hits Portugal property market
Thursday 15th of September 2011
Despite slight improvements in the market for Property In Portugal, the overall situation remains negative according to the latest figures. Weakening demand for homes is continuing to drive down prices and confidence in the country’s property market as austerity measures put families off buying homes.
Weak demand contributing to slow property market in Portugal
The latest Royal Institution of Chartered Surveyors/CI Portuguese Housing Market Survey found that both the national confidence and national activity indices improved in July, although both remain in negative territory.
Property In Portugal continues to struggle thanks to weak demand. RICS senior economist Josh Miller said: “In Portugal, it is the demand side of the equation that is weighing down on prices. Indeed, the double digit unemployment rate is feeding through to weakness in new buyer enquiries.
“Unlike in Spain and the US, oversupply is not an issue in Portugal. The official statistics show no evidence of overbuilding prior to the economic downturn and new vendor instructions have been falling all year. Therefore, once the economy starts to recover, Portugal will not have to cope with the residential inventory issue that other countries face.”
Algarve performing better than other regions
While the national picture is weak, there are variations between the main regions of the country. For example, falls in value slowed in the Algarve but accelerated in the Porto and Lisbon regions. In addition, sales expectations deteriorated in Porto but markedly improved in the Algarve.
CI Spokesman, Ricardo Guimaraes, said: “Survey respondents note that limited residential sales are due to tight credit constraints and the government’s fiscal austerity measures, which are reducing families’ incomes.
“Because of the difficulties buying a home at the moment, many families are instead turning to the rental market, which is experiencing a boost in activity.”
