Real Estate Overview in 2017, by Casas do Barlavento

The real estate market dynamics in Portugal is recovering and has already increased significantly on last year’s figures.  According to the Portuguese Real Estate Professionals and Brokers Association (APEMIP) it is estimated that there will be a 30% increase in real estate sales by 2017. At present, Portugal is in a unique position to offer political and social stability to foreign investors. Being an important factor is not the only one - the recovery of the real estate sector would not be possible without the reduction of interest rates on mortgages that are historically low - according to the National Statistics Institute (INE) the interest rate on housing loans are continuously decreasing for the past 13 months (the lowest value since 2009), which encourages the Portuguese buyer. In addition to these rates, spreads are also being successively cut, which implies not only a reduction of existing credit charges but also an improvement in the conditions for new operation (8 national banks have minimum spread margins below 2 %).

For Casas do Barlavento UK buyers continue to be the majority (45%), which contrary to expectations, with Brexit, the recent elections, social instability and GBP value, surprised the market with an increase in demand, possibly some buyers wishing to invest in the Euro Zone, in the facilities offered by the Portuguese banks; an higher property taxation in the United Kingdom and unattractive interest rate in British banks. The Swedes (24%) and the French (15%) increasingly seek their place in the Algarve sun and take advantage of the tax benefits of Non Habitual Tax Residency scheme, based on the exemption of the international juridical double taxation of income from foreign origin, to pensioners and retirees. Finally, largely due to the Golden Visa, by the aforementioned political security, social and quality of life, Europeans and non-Europeans also started looking for real estate to invest in the Algarve (16%).

This quick shift in real estate sector resulted in the difficulty of the market in keeping up with this growing pace of demand for home acquisition: "It has been a long time waiting for this turn in the market but I can say it has come and coming fast. We at Casas do Barlavento are noticing that supply and demand is happening and we cannot get enough product in to satisfy the requests ", says Paul Cotterell, Sales Director of Casas do Barlavento.