Now Portuguese property lenders spring back to life
Specialist international mortgage broker Offshoreonline.org is reporting the arrival of another new lender on the Portuguese property market, which follows closely on the news that OECD research published in 2013 suggested property in Portugal was undervalued by between 5pc and 10pc, when price ratios for rents and wages were compared with the long-term average.
Portugal’s market was estimated to be cheaper than any of the other bombed-out Mediterranean states. Spain was said to be as much as 20pc too high.
Offshoreonline.org noted that for much of the last four years, Portuguese euro mortgages for expatriate property buyers have been virtually impossible to arrange, simply because banks withdrew from the market or set such extreme underwriting terms that many would-be buyers simply walked way. The broker is now reporting the return of 80% mortgages “for exceptional cases” with 75% loans readily available. Mortgage fees are competitive at €780 and although high by other European standards, interest rate spreads of 5.5% over 6 month Euribor are the lowest seen since 2009 in many instances
Portuguese property has always appealed to a higher end buyer than many other European destinations, and historically, Portuguese property was always more expensive than comparable UK real estate. Now, however, sellers are having to agree prices which are in line with bank valuations, rather than market demand, meaning that, according to local listing site Meravista, which has 24,000 properties available, Portuguese property is now up to 32% cheaper than the UK.
The recovery in UK property values is also likely to have an impact on Portuguese property transactions too. Offshoreonline.org managing director Tim Harvey notes that “Historically, many buyers would have sold in the UK prior to buying in Portugal. With the UK property market now firing on all cylinders, this is again possible for many.”
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