Home prices in Portugal fell again in June, albeit at a slower pace, as both national activity and confidence levels declined further, according to the latest RICS/ Ci Portuguese Housing Market Survey (PHMS).
Prices are falling across the country, due to weakening demand, as the country's economic problems intensify.
The PHMS shows a further deterioration in market conditions relative to May. The National Activity and National Confidence indices fell by another one and two points respectively to –49 and –61. However, although the market remains fragile, prices are falling at a slower pace than previously recorded.
Portugal's rising unemployment rate – currently at 12.4 per cent – and battered economy is unsurprising placing downward pressure on home prices and activity, while confidence remains very depressed, presenting lots of negotiating opportunities for anyone looking to but property in Portugal.
RICS Senior Economist, Josh Miller, said: "Interestingly, the main factor weighing down on prices is falling demand; rising supply is not an issue. However, given that the vast proportion of Portuguese mortgages are tied to short term interest rates, if the ECB continues to hike its main policy rate, then the risk of forced selling by Portuguese homeowners will likely increase."
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