Breaking News

The dizzying fall of real estate in Portugal

After years of unbridled price increases, Lusitanian house prices are collapsing due to the health crisis. Even in Lisbon or Porto, according to the weekly Sábado.

After years of unbridled price increases, Lusitanian house prices are collapsing due to the health crisis. Even in Lisbon or Porto, according to the weekly Sábado.

(DH) – While many Portuguese have struggled to find accommodation after 20% price increases over the past three years, real estate has suffered a serious backlash in Portugal due to the covid-19 pandemic. The weekly Sábado, in its June 4 edition, reports that due to the health crisis, house price reductions can go up to 46% in ten districts of the country, including those of Lisbon and Porto.

For its investigation, the weekly Lusitano based on data from the real estate portal Idealista and several agencies across the country and says that until a vaccine against covid-19 is not discovered, forecasts for owners who wish to sell their property will not be encouraging. “The sudden drop in income, unemployment, the tax burden and the urgent need for cash are major obstacles to real estate transactions,” he writes.

And Sábado to cite the example of Pedro Borges, owner of his renovated T3 + 2, of more than 150 m2, with 50m2 of terrace in the heart of Penha de França, the typical district of Lisbon. At the initial sale price of 265,000 euros, five months ago, the owner has already agreed to a discount of 60,000 euros. “I have an urgent need. I need to sell to recapitalize myself, because I have other real estate projects on hold, ”he told the magazine.

In recent years, Portugal has turned into a land of opportunities for European investors and retirees – especially French – due to its favorable taxation. This is how, according to the daily Diário de Notícias, House prices had increased 4.5 times more than wages in ten years. Last year, a study by Confidencial Imobiliário reported that since 2010 the value of real estate has exploded by 46%. During the same period, the average gross income of Portuguese employees increased from 1,036 to 1,188 euros, an increase of only 10.4%.

Are we headed today for a real estate crash? In response to this question, some rating agencies, such as Standard & Poor’s, want to be reassuring. They do not plan to tumble because, in their view, government actions in favor of employment should avoid the collapse of the housing market. But the situation could change in the event of new waves of infection, they say all the same.


Tags

Related Articles

Back to top button
Close
Close