The temperate climate and breathtaking scenery of Portugal’s southernmost region has long made the Algarve a property magnet for British expats. And as the pound reaches its highest level against the euro since the 2007/08 global economic crisis, a relatively affordable Portuguese property market is becoming even better value for sterling buyers.
While dramatic cliffs, cathedral-like grottos and secluded sandy coves dot the shoreline, the Algarve coastal region features an exclusive centre where the rich and famous purchase property in places such as Quinta do Lago. More affordable is the western Algarve and recently there has been a surge of interest in the east. From converted convent to quirky townhouse, choice abounds.
Although Portugal and its property market were hard hit by the global crisis, nowadays the country is showing signs of recovery. That Portugal exited from the €78 billion (£55 billion) EU/IMF bailout of 2011 in May 2014 is seen as good news. So too, the IMF forecasts GDP to reach 1.6 per cent this year.
The residential real estate market in Portugal is seeing an ongoing steady recovery in prices, supported by rising demand and increasingly strong growth in sales activity, according to the latest index.
While the lettings market has seen rents stable for a fourth month in succession following years of persistent decline, the index survey from the Royal Institution of Chartered Surveyors (RICS) and Confidencial Imobiliário shows.
The data also shows that new buyer interest continued to rise at a firm pace across all regional markets, with growth particularly pronounced in Porto during June. But the market is still open to the weakness of the euro zone, particularly Greece.
The pound rose to its highest rate against the euro since November 2007 on Thursday, climbing to €1.4350 at one point.
The euro fell against both the pound and the dollar as markets assessed potential interest rate moves over the next few months.
The European Central Bank is expected to maintain its loose monetary policy for some time to come.
However, markets are now waiting for rate rises in the UK and US.
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