Effect of property bubble burst not serious in Portugal

By CHRIS GRAEME [email protected]

Portugal was not as seriously affected by the collapse in property market prices as other European countries during the economic crisis.

Spain, Holland, Ireland Greece, Italy and even France were far worse hit by the burst in the property bubble resulting from over vigorous and unrealistic market speculation in 2008 and 2009.

According to a study on market prices carried out by Era Portugal, one of the country’s largest estate agents, prices in Portugal remained stable even if transactions suffered.

In the first study to analyse market realities and trends in 16 of the European Union’s real estate markets, the volume of transactions carried out in 2009 was compared with that of 2008 while predictions were made for 2010.

In Portugal, the number of houses sold fell by 16 per cent, resulting by the end of 2009 in a total of 145,900 properties sold. Era originally estimated a fall of 13.5 per cent.

This compares with the 173,000 houses sold in 2008, implying a fall of 28,000 properties sold.

According to experts in the sector, estimates point to the existence of between 350,000 and 400,000 properties for sale in Portugal.

The fall in the number of sales was across the board in the European context, with the exception of Germany, which managed to enjoy and increase in sales by around one per cent.

The report, Era Europe – Residential Real Estate Market Trends 2009-2010, stated the belief that property interest rates would not remain at their historically low levels for long.

According to the study, Ireland suffered a 23 per cent contraction in property sales while sales in Greece slumped by 27 per cent.

Surprisingly sales in Holland, which had not suffered as much in the economic downturn, saw sales plummet by 30 per cent.

In France 800,000 properties were sold in 2009, representing a fall of nine per cent, while the average price per square metre sold also plummeted across the European board with Ireland suffering a fall of 20.95 per cent but Portugal sustaining a modest fall of 4.35 per cent.

On average, it takes 240 days to sell a property in Portugal the Era study found.