Portuguese property: "undervalued and affordable"

Portuguese property: "undervalued and affordable"

Some of the best news ever for people interested in buying Portugal property has been published over the last two months.

As of May 2013, the 34-country OECD (Organisation for Economic Co-operation and Development) has listed Portugal as one of the most favourable countries in the world to buy and own real estate.

Not only is Portuguese real estate vastly undervalued, but for both price-to-rent ratio (a measure of the profitability of owning a house) and the price-to-income ratio (a measure of affordability), Portugal is arguably the most attractive country in continental Europe, according to the OECD.

In layman's terms, compared to the past, housing is 7 per cent cheaper and earnings from renting are 13 per cent more favourable.

At the top of the OECD's table, ie with the most over-valued property, are Belgium, Norway, Canada, New Zealand, France, Australia, Sweden then the UK.

These findings are reinforced by Bloomberg.com's news last month that Portuguese banks are selling off 10,000 homes discounted in an effort to reduce their stockpiles and create demand.

The Portuguese property industry had its worst year in 2012 for decades but the government is trying to increase foreign investment with its "golden visa" scheme, offering residency to non-EU buyers who spend €500,000 on a property.

Property on the Algarve is at its most affordable for years, according to Meravista, a property search website that focuses exclusively on Algarve property.

Anita van Huson, co-founder of Meravista, says: "Meravista's database for the past year confirms that Algarve properties which have been reduced in price have done so at range of between 10 - 30 per cent from their initial offering".

The accompanying property is a three-bed home in Sao Bras de Alportel for €165,000.

To illustrate the affordability and value of Portuguese real estate, Statistics Portugal for June 2013 has the bank valuation average cost per square meter of a dwelling in the Algarve as being 1228€/m² and for Portugal as a whole at 996€/m².

According to one survey, only three countries in Europe have a lower price per m² than Portugal: Macedonia, Bulgaria and Moldova.

As global conditions continue to improve, domestic demand within Portugal is improving and economic growth is already showing signs of being on the road to recovery. Portugal's current account deficit is expected to close by 2014.

Sigrun Vaz doz Santos of Coast & Country homes, located in the popular coastal town of Quarteira, says: "Coast and Country started in 2010 in a very depressed market. However since the start of this year, we have seen the number of enquiries increase by 20 per cent, which demonstrates that the Algarve property market is on the road to recovery."

Get help buying a property in Portugal

A Place in the Sun produces free detailed guides to buying property abroad. Download the guide to buying a property in Portugal or search our for sale listings for a property in Portugal.

The Portuguese Pavilion at A Place in the Sun Live is a great place to start your journey to owning a home in Portugal. Taking place at the NEC Birmingham on 27th-29th September, A Place in the Sun Live is the official exhibition of the hit Channel 4 TV show and features live appearances by the show's TV presenters Amanda Lamb, Jasmine Harman, Jonnie Irwin and Laura Hamilton.

The Portuguese Pavilion sponsored by Premier FX is home to property agents and developers selling property from all along the Algarve and Silver Coasts.

Tickets to A Place in the Sun Live are on sale now at two for £15. Click here to book.

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