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Portugal expects property “boom” in 2016

Portugal’s property market is expected to grow 35%-40% in 2016. The estimate was made recently by Luís Lima, president of the national property agents’ association APEMIP.

He told Renascença radio his assumption is based on the large amount of money – around €1.6 billion – banks have lent property buyers in the first months of 2016.

But Lima also says more people now believe “it is more profitable to buy property than to keep their money in a bank”, due to all the banking collapses that have plagued Portugal in recent years.

A recent study has also found that house prices increased 5.4% in Portugal between April and June – except in the Alentejo and Madeira where prices dropped 3.3%.

The data was revealed by online real estate portal Idealista.

Lisbon is where the price per square metre of property (€1,451) is highest, followed by the Algarve (€1,361) and Madeira (€1,102) and the Alentejo (€1,101), even despite the price drop they both experienced.

The lowest prices were registered in Santarém, Braga and Castelo Branco.

The study used data from the over 40,000 ads that Idealista featured on its portal between April 15 and June 15.

While all this might sound like good news on paper, there is also another side to the story, says Portugal’s home owners’ association (ANP).

António Frias Marques is worried the currently low interest rates could increase again and cause another financial debacle.

“There’s no guarantee that, in six months, a year or two, interest rates will not skyrocket,” he said, fearing people will then not be able to “meet their commitments”.

“It seems people did not learn from the previous crisis,” the president of ANP added.

michael.bruxo@algarveresident.com