Prices are falling in Lisbon as poor lending conditions for locals mean that agents are unable to sell property, even in prime locations.
By the end of the year it is predicted that only 5,000 property transactions will have taken place in Lisbon, a quarter of the number in 2006, and as a result property prices are being slashed throughout the city. According to local agents many houses in Lisbon are selling at nearly 30 per cent of the price they would have fetched before the global economic downturn.
"Portuguese banks are not lending and there is the threat of rising property taxes as values are reassessed. Offers are routinely 20 to 30 per cent below even reasonable asking prices," commented Frederico Mendoca of local agents Abacus Property.
The market in Lisbon is now a great one for investors looking to rent out their properties, as both long-term and holiday rental property remains extremely popular. In September, the Algarve Hotel and Tourist Resort Association reported that the country had seen a 16.1 per cent rise in British visitors and a 17.3% increase in Dutch tourists compared to 2011.
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