Portugal’s property sector cautiously optimistic.jpg

Portugal’s property sector cautiously optimistic


[email protected]

THE PROPERTY market in the future must be associated with sustainable development, socially responsible pricing and the environment.

These were the conclusions of the Salão Imobiliário de Lisboa 2008 (SIL), Lisbon’s annual property fair, which ran until October 26 at the Feira Internacional de Lisboa (FIL) at Parque das Nações.

This year’s fair counted on 300 exhibitors spread out over three exhibition halls and an estimated 33,000 professional visitors.

Among the developments highlighted at SIL was the Tróia resort, south of Lisbon, the luxury villa development at Socalcos do Douro, northern Portugal, and even housing at Alta de Lisboa. The Casa Sil was another novelty at the fair, a showcase 1,200 square metre development featuring some of the best that Portugal has to offer in terms of design.

Sandra Fragoso, manager of this year’s event, admitted that it was difficult for property developers and related businesses as a result of the contracting market and international financial recession.

“The phenomena of market globalisation means that no economy is immune from the effects of the crisis,” she said, adding that she believed the national market was sufficiently robust to face the future with optimism.

New reality

However, despite the assurances, there was an eerily empty feeling to this year’s fair when The Resident paid a visit on Saturday, normally one of the busiest days for the general public.

“It is obvious that these times of crisis herald a new cycle and a new reality,” she said, adding that SIL would continue to invest its energies in the international markets since many foreign investors recognised Portugal’s property market had potential.

SIL, now in its 11th year, has as its main objective the opening up of new business opportunities in the various market segments: residential, tourism, retail and office.

Portugal’s residential sector has been, perhaps, the most affected by the current world financial crisis with the slowdown in the Iberian market now evident from a plummeting number of transactions.

The reasons are all too clear: changes in bank finance terms and lack of liquidity have made loans for mortgages and development costlier and harder to come by, while rising unemployment and falling consumer confidence mean that people are putting off moving or purchasing a property.

In tourism, after a bumper year in 2007, where the Portuguese hotel sector did well, the economic slowdown has now forced the tourism market to adopt a more cautious and pragmatic wait-and-see attitude.

The retail sector had been going great guns since the early 1990s with the mushrooming of shopping centres all over the country – an area in which Portuguese developers have a great deal of expertise – but this too is showing signs of deceleration as the market reaches saturation point and capital dries up.

However, there has been good news for property developers with liquidity shifting their operations abroad in the fast expanding markets of Brazil, which is enjoying healthy growth levels, and Angola which is developing fast.

Do you have a view on this story? Email: [email protected]