Portugal affordability and undervaluation of real estate

Some of the best news ever for people interested in buying Portugal property has been published over the last two months.

As of May 2013, the 34-country OECD (Organisation for Economic Co-operation and Development) has listed Portugal as one of the most favourable countries in the world to buy and own real estate.

Not only is Portuguese real estate vastly undervalued, but for both price-to-rent ratio (a measure of the profitability of owning a house) and the price-to-income ratio (a measure of affordability), Portugal is arguably the most attractive country in continental Europe, according to the OECD.

A plot of the OECD’s data gives the percentage of over- or under- valuation of house prices relative to long term averages. The layman’s take from all this is that, compared to the past, housing is 7% cheaper and earnings from renting are 13%more favourable.

In the table format the actual numbers for each country can be compared.

According to one survey, only three countries in Europe have a lower price per m² than Portugal: Macedonia, Bulgaria and Moldova. “All the more reason to select the Algarve for your retirement,” said Anita van Huson.

As global conditions continue to improve, domestic demand within Portugal is improving and economic growth is already showing signs of being on the road to recovery. Portugal’s current account deficit is expected to close by 2014.

Some Meravista real estate agents are confirming an increase in sales in the first half of 2013 compared to the same period in 2012.

Sigrun Vaz doz Santos of Coast & Country Homes, located in the popular coastal town of Quarteira, said: “Coast and Country started in 2010 in a very depressed market. However, since the start of this year, we have seen the number of enquiries increase by20%, which demonstrates that the Algarve property market is on the road to recovery.”

Meravista recommends investment now while the Algarve real estate market is at its lowest. Read more on this subject on Meravista’s blog.

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Article supplied by Meravista. Conceived, designed and developed over the course of 18 months, Meravista is a property portal focused exclusively on Algarve property in Portugal, targeting buyers across Europe.