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Portugal Property News: Property prices up

Date: 12/4/2010

The Financial Times (FT) this week said that house prices in the Euro Zone fell by 4.6 percent last year in relation to 2008, while the drop was less pronounced in 23 European nations, where a reduction of 2.8 percent was reported.

Spain, so often compared to Portugal in terms of house prices, witnessed a 7.4 percent loss of value on homes. Neighbour Portugal however, managed to buck the trend, and recorded house price increases of 0.4 percent in a year when the global recession wreaked havoc.

Ireland, Slovakia and Iceland were the hardest hit by the housing crisis, with prices falling by 12.4 percent, 11.1 percent and 9.7 percent respectively last year.

Market analysts in Portugal have underwritten the findings published this week in the FT, saying the country has always assumed a cautious approach to real estate development, at least in comparison with countries such as Spain and Ireland, which has allowed it to emerge from the international housing crisis relatively unscathed.

"We never reached levels of high debt and our banks have always been more conservative. This is largely why the crisis has not been as profound in Portugal as elsewhere in Europe", Business Director of Aguirre Newman was quoted as telling Diário Económico this week.

The Director of Century 21 Portugal, Ricardo Sousa, meanwhile added that "Portugal has been recording a growth tendency since June 2006", but in a stable manner, and not as drastically as in the United Kingdom or the United States.

According to Mr Sousa, the worst period for Portuguese real estate was at the start of 2009, but the market rapidly stabilised in the ensuing months.

"People are still buying, but nobody is buying their dream house. They are much more cautious and are opting for cheaper homes", he said.

However, Residential Market Director of CB Richard Ellis told Diário Económico that the Portuguese real estate market stability has another explanation: "This increase is probably due to more luxury homes being sold", Luís Saldanha said.

According to the FT, the Eurozone and Europe indexes, house prices fell more than seven percent in the larger, more developed economies such as the UK, Spain and France.

The FT further found that "even Germany, traditionally a more stable market, saw a decline of more than 4 per cent in the second-hand home market and an overall decline of 1.8 per cent."

The biggest falls were in the countries hit hardest by the global financial crisis, the study found. However, quarterly data suggest the worst may be over for the UK, Spain, France and Germany, which registered marginal growth in the fourth quarter compared, with the third. Source: The Portugal News

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