House prices in Portugal “almost double that of European average”

More ‘good news’ for all those who have invested in property in Portugal: the last three months of 2018 saw house prices soar in relation to the ‘European average’.

That average (an increase of 4.3%) involved downturns in some markets (particularly Sweden and Italy, down 2.8% and 0.8% respectively).

Portugal’s healthy the 8.5% increase is nonetheless ‘in the middle of the scale’, with prices in Ireland, Holland and Slovenia rising even higher.

Indeed, Slovenia is at the top of all the increases, ending the three month period with prices up by a whopping 15.1%.

Meantime, Dinheiro Vivo has sounded the alert, explaining that in the context of warnings from the Bank of Portugal regarding increasing property prices (click here)), the government has just given the go-ahead to the creation of funds that could conceivably push prices even further.

SIGI, or societies of real estate investment and management, are otherwise known as REIT (real investment trusts), says the financial news website.

“They promise to channel more money into the industry and bring further dynamism, particularly within the rentals market”.

The legislation was ‘approved’ by the Council of Ministers earlier this month and now awaits the presidential ‘rubber stamp’.

Says DV, this is a development that has been “requested for a long time” by the property sector, “but it could drive prices up even further”.

REITs already exist in 37 countries, including Spain where they have indeed been criticised for contributing to property price increases.

Supporters of the trusts however refute these claims, suggesting they attract more available capital and thus make the sector more stable, reducing the chances of speculation.

DV adds that whatever the truth, new laws are coming in force in Spain this year to make REITs’ tax regime “less favourable”.

natasha.donn@algarveresident.com