I’ve been personally involved in the Portuguese property market for over 25 years, so by now I know Portugal pretty well. In fact I’ve just returned from a business trip there, and I thought it would be a good time to reveal the current state of play in the Portuguese property market – and maybe dispel some myths.
When people consider Portugal as a destination, they normally think of golf, port, and beaches. However, there does seem to be some confusion with its neighbour Spain, especially regarding the beaches. Portugal and Spain are very different, I can assure you!
Portugal’s beaches are often much longer and western facing, and bizarrely they are often seen as cooler, since they are more subject to Atlantic influences rather than the Med’. Having just experienced temperatures of nearly 100 degrees in September, I’m not sure this impression is correct!
It’s a common misconception that the Spanish and Portuguese property markets are similar. I do not believe this is the case, primarily because Portuguese holiday areas are less dense, and the overall ambience in some of the popular areas such as Quinta do Lago, Vale do Labo, Villamoura, Cascais, Estoril and parts of South and North of Lisbon (such as the Silber Coast) is more acceptable. In addition, the build quality is often to a better standard, especially as there are not so many unfinished developments and cranes everywhere!
Portugal needs to market itself better and explain more clearly the differences between itself and Spain. If it could do that, it would be of great benefit to the economy. Tourism & property sales are clearly areas where Portugal needs to become stronger if it is to come out of its recession, particularly because it does not have as strong an industrial base as Spain.
My view is that properties prices should be cut to attract more buyers. I don’t say this because Spanish developers or agents have already done so, but there are buyers in countries such as Scandinavia and the Middle & Far East. These buyers expect a package that offers both a reasonable price combined with a good potential yield. Thankfully, Portugal is still a major summer holiday destination (and golfing centre in the winter), so the right rental package should be quite feasible.
Unfortunately, I do come across agents and developers who feel that if Portugal were to cut its prices too much it would demean the overall ‘product offering’. I think this is an elitist and self-serving attitude and they do need to realise what is happening in other similar markets, for example Florida, Spain, Turkey, Cyprus. Those markets are starting to flourish as similar steps have already been undertaken.
When I speak to investors around the world and I mention Portugal, there is some confusion over what Portugal has to offer. If there are ways to promote the country and get people to visit, to see what is available and why Portugal is different, then I genuinely feel that more sales are achievable. The right product is available, it just needs to be better packaged and promoted. Portugal is a wonderful country in which to purchase overseas property – which is why I go back again and again!