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#1 dipstick

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Posted 27 February 2012 - 04:03 PM

Okay, what do people think of Portugal regarding property?

Anyone with any practical experience?

#2 fourminutewarning

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Posted 27 February 2012 - 05:53 PM

Hi, This is my first post.... but I have been reading the HPC site since 2008. I am from Portugal but I live in the UK. I bough a place in Portugal in 1999 (off plan) and moved in in 2002. I have not actually lived there long because I moved to britain. I rented the place for a number of years and it was a nightmare! Rental laws in Portugal do not protect the landlord in any way. Moving to the question about HPC. Portugal is undergoing a MASSIVE HPC. I always thought that this was going to happen because the bubble was large. In 2008 when I starting reading this blog, I warned everyone around me and they thought I was crazy... now they are starting to believe me. When I sold I also put a good part of the money that was left in gold and silver (Thank you Peter Schiff!). I have not done badly.
Back to house prices. Until 2010, the Labour (surprise, surprise) government tried to make everyone believe that there was no problem. This maintained house prices stable. when the S started to HTF, and it was not possible to maintain the appearances, house prices started to come down. Three years ago you could get a 1% + EURIBOR rate, today you are lucky if you get 3% + EURIBOR. SSome say that baks are charging 4-7% + EURIBOR. s you know, this will impact +rices massively. at the beginning I forecasted a 30% crash over 5 years, I am now tempted to revise it to ca 50%. To compund the problems, there are more than 1m empty homes in the country (we are a 10m country only!) It is a massive buyers market, but buyers need to wait for more blood to get good deals.

#3 dipstick

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Posted 27 February 2012 - 07:25 PM

Thanks very much for that informative reply.
I did wonder whether the prices there had only just begun to fall.

Now for the million dollar question:
Why are you in the UK and not Portugal? Not meaning to be nosey but do you prefer the UK to live?

#4 fourminutewarning

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Posted 27 February 2012 - 09:25 PM

Thanks very much for that informative reply.
I did wonder whether the prices there had only just begun to fall.

Now for the million dollar question:
Why are you in the UK and not Portugal? Not meaning to be nosey but do you prefer the UK to live?



In the UK I can get a lot for nothing... free accommodation, free healthcare, and money from the government! (kidding)

I did my studies in the UK (PhD) and stayed working here for a British University. I did my PhD part time, while working for a Portuguese higher education institution, and I was literally kicked out a few months before finishing the PhD... I was going to be the first one with a PhD in the area of expertise of the School I was working for.... Academia in Portugal is not the best place to work... as most academics are not very busy (or if they are, is with things that are not important) - they have a job for life, there are no quality standards whatsover because jobs are secured for life - , they spend their time trying to derail the efforts of those who want to do something constructive. In some places, it is like a mental house (and I am not exhaggerating, believe me). I would prefer to live in Portugal for the sun, the food and the family. The UK is a much better organised society, there is still common sense in many areas. In the end, as I spend quite a lot of time abroad (holidays or work), I found a good balance. If I had to stay in the country for 12 consecutive months, I don't think I would be here...

Going back to house prices (I was rushing when I first replied to you), in Portugal house valuations are basically in the hands of banks (officially, they aren't...). So they value them as they wish. When I sold (to a first time buyer who paid well over what she should - 8% over the other offer I had from an investor), the bank had the policy of giving only up to 80% of the value. Guess what happened? the value they gave to the flat was high enough so that the price she was paying was 80% of the valuation...

I have no doubt that it will be mayhem there... Even where I sold (a very nice development in the outskirts of Lisbon), the prices are cmoing down sharply. I can only imagine in the less desirable places...

I still own a flat with my brothers, which we bought off plan too. I tried to offload it just before completion (2009), but they did not want to. I then 'forced' them to accept a 25 year fixed mortgage (I think we are paying around 5%). We pay more than we would if we had a variable rate, but I believe Portugal's (and europe's) situation to be unsustanable and high inflation will kick in sooner or later (with interest rates going up) which will compensate for the higher costs now. Anyway, I am comfortable with the arrangement for several reasons (which I won't mention here), so this flat does not affect my sleep.

If I can asl, why are you interested in finding out about house prices in Portugal? Are you Portuguese? Planning to buy there?

#5 dipstick

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Posted 28 February 2012 - 06:15 AM

Sorry about your PhD...

It's funny though, your description of academia in Portugal immediately reminded me of university life in the UK. A very safe institution for those employed.

Very, very interesting to hear from someone who has seen both sides of the coin and is not a Brit.

Yes, I was thinking of at least renting in Portugal to see what it's like. To be honest it's the one place that I get the feeling most Brits actually stay. In France they seem to move in and out like a fiddler's elbow.
I did hear someone else describe Portugal as 'chaotic' though.

My current impression of the UK is of the illusion of organisation and common sense. It promises much and delivers little. The UK is fine if you stay inside the box. Once you move outside, either intentionally or unintentionally, the system fails. It failed me big-time and all that stuff you mention in your first line (joking aside) I didn't get. I figured that if I am going to live in a system that is unproductive, then I may as well do it where the sun shines and people aren't always at each others' throats.
Plus, I am told, the Portugese actually like the Brits? This, of course, could be a complete crock.

#6 eight

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Posted 28 February 2012 - 07:29 AM

Hi, This is my first post.... but I have been reading the HPC site since 2008. I am from Portugal but I live in the UK. I bough a place in Portugal in 1999 (off plan) and moved in in 2002. I have not actually lived there long because I moved to britain. I rented the place for a number of years and it was a nightmare! Rental laws in Portugal do not protect the landlord in any way. Moving to the question about HPC. Portugal is undergoing a MASSIVE HPC. I always thought that this was going to happen because the bubble was large. In 2008 when I starting reading this blog, I warned everyone around me and they thought I was crazy... now they are starting to believe me. When I sold I also put a good part of the money that was left in gold and silver (Thank you Peter Schiff!). I have not done badly.
Back to house prices. Until 2010, the Labour (surprise, surprise) government tried to make everyone believe that there was no problem. This maintained house prices stable. when the S started to HTF, and it was not possible to maintain the appearances, house prices started to come down. Three years ago you could get a 1% + EURIBOR rate, today you are lucky if you get 3% + EURIBOR. SSome say that baks are charging 4-7% + EURIBOR. s you know, this will impact +rices massively. at the beginning I forecasted a 30% crash over 5 years, I am now tempted to revise it to ca 50%. To compund the problems, there are more than 1m empty homes in the country (we are a 10m country only!) It is a massive buyers market, but buyers need to wait for more blood to get good deals.


Interesting. I've been looking to rent in Portugal and wondered why there were so few properties for rent there.
There is a war going on for your mind. If you are thinking, you are winning.

#7 fourminutewarning

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Posted 28 February 2012 - 01:58 PM

Interesting. I've been looking to rent in Portugal and wondered why there were so few properties for rent there.


The rental market was always limited in Portugal for the reason that rents were frozen in 1975 have not moved up much since then for those who have a contract up to 1991, when a new law came in to force. In practice this means that you can live in central lisbon, on a 5 bed flat, for 50 pounds a month! Obviously, this has frozen the market in that people who live under the before-1991 law do not move. I have a relative who even has a holiday flat for which he pays next to nothing, and the landlord can do nothing to evict him.
For those who are renting based on the post 1991 law, as I said the rights are very much on the tennants side. For example, if the tennant stops paying, the landlord has to evict through the court which traditionally took 2 years. A few years ago a new law was passed which shortened this period, bu it is takes at least 6 months, more likely a year or so. For example, the law says that you can start the eviction process only after 3 months in arrears and then you have to give the tennat another 3 months to pay... the end result is that you have people who live off this right, moving from house to house (only pay the first rent).

A new law is being passed to change both the pre-1991 contracts (basically to bting rent closer to the actual current market value) and to facilitate throwing tennants out if they don't pay...

A lot of the landlords prefer not to rent their flats to avoid problems - they sit on the property and benefit from capital growth. As this erodes, it is possible that they startchanging their minds and be more willing to rent. But this will take time.

#8 Silversea

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Posted 28 February 2012 - 04:47 PM

Hello there, I'm a long time lurker of this forum but now decided to register to reply to this thread.
I am Portuguese and live in the UK as well (PhD in the UK again followed by [failed] marriage to English subject)!

I have 2 flats in Portugal and have resisted renting them as the prospect of basically losing them to tenants is very unappealing.
They also become virtually unsaleable if rented out - unless they're sold to the tenants themselves, usually for a fraction of the value.
The problem being that I am paying a lot of money in services for empty flats. Hmmm....

dipstick - couldn't agree more with your observations about the UK.
Portugal isn't perfect though, I would certainly recommend renting out first as well as setting out priorities.
What do you expect from life in Portugal? What will you live of? Are you planning to set up a business? etc.

fourminutewarning, is this new law being drawn to appease the Troika's dismay at the state of the rental market in Portugal?

#9 dipstick

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Posted 28 February 2012 - 05:40 PM

This is starting to look like my cunning plan to uncover lurkers!

Very interesting stuff about the rental situation. I'd never heard about it before. We sit in the UK and make judgements about what's happening with the property market in other countries on the presumption that they all function in the same way as our own. Obviously not.

Silversea: What do I expect from Portugal? Well, I'm not quite sure. Then again I'm sure what I don't want. I'm not the type of person that wants to live near the coast and go to pubs and restaurants. I'm looking for a more simple existence in a rural situation where it's seen to be more the norm than the exception?
Then again, I am self-employed and I do have mainly european customers, so I need good phone and internet access, so I can't be completely out of the loop.
It sounds very patronising, but I am more interested in the culture of the country, in ways such as things they grow, produce and how they do it, - the general rural livestyle - rather than hanging around with ex-pats.
Can't speak a word of Portugese and I understand it is the very devil to learn!
I'm also not interested in being in a country run by rules. We seem to have become governed by rules in the UK more and more appearing everyday whether they make sense or not. And we adhere to them without question. Although I was talking to a French man the other week and he said, 'haven't the British always been like that. Very compliant?'
Ouch.

So, I don't think you ever know what it's going to be like until you get there - but it would be nice to have both the pros and the cons to at least be aware.

#10 fourminutewarning

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Posted 28 February 2012 - 06:01 PM

Hello there, I'm a long time lurker of this forum but now decided to register to reply to this thread.
I am Portuguese and live in the UK as well (PhD in the UK again followed by [failed] marriage to English subject)!

I have 2 flats in Portugal and have resisted renting them as the prospect of basically losing them to tenants is very unappealing.
They also become virtually unsaleable if rented out - unless they're sold to the tenants themselves, usually for a fraction of the value.
The problem being that I am paying a lot of money in services for empty flats. Hmmm....

dipstick - couldn't agree more with your observations about the UK.
Portugal isn't perfect though, I would certainly recommend renting out first as well as setting out priorities.
What do you expect from life in Portugal? What will you live of? Are you planning to set up a business? etc.

fourminutewarning, is this new law being drawn to appease the Troika's dismay at the state of the rental market in Portugal?




silversea, yes the new law comes after the influence of the troika. to be honest I am not sure how much it will change in practice... politicians are experts in persuading us that things are changing when in practice they are not... It is still going to be difficult to throw a tennat out (or not as simple as it is in the uk), but things appear to be moving in the right direction. Personally, The best is to rent! cheaper (when you factor in the house price decreases) and it gives you the flexibility to move should you need/wish to. I rent in the UK and I am very happy with this solution. If I was going back to Portugal, I would do the same. I won't be bying for a long time - until the topic of conversation is how bad an investment house are!

#11 dipstick

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Posted 28 February 2012 - 06:21 PM

From what both of you are saying it seems that the property price falls in Portugal have really only just started in the last year or so. I wonder if the same can be said for many other parts of Europe?

#12 Silversea

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Posted 28 February 2012 - 06:28 PM

dipstick, I had a similar conversation with a friend last week about buying property in Portugal. She was looking at some hillside ruins (described on a website as picturesque stone houses), which basically the Portuguese wouldn't touch with a bargepole...

My advice: yes the thought of the countryside is nice but small villages can be isolated, boring and sometimes poor. On the other hand, stay well clear of the Algarve if you'd like to avoid large numbers of British ex-pats.

A decent-sized town further north, away from the biggest cities, is probably a good compromise IMO. Lisbon and Porto are interesting but big places, although the outskirts might be ok. You then have a number of smaller places - Coimbra in the center has a big university, very good hospitals etc. but is quite small and has a medieval centre. There's Evora, Leiria, Figueira da Foz on the coast, etc. The further up north you go the cooler it gets.

Give us a shout if you'd like to rent for a few months around the centre of the country (oh yes what did I just say about renting? :-)

You can use http://www.livemocha.com to learn basic Portuguese for free (including pronounciation). Just make sure you choose Portuguese from Portugal, not Brazil.

#13 Silversea

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Posted 28 February 2012 - 06:34 PM

From what both of you are saying it seems that the property price falls in Portugal have really only just started in the last year or so. I wonder if the same can be said for many other parts of Europe?


I know that the prices in Bulgaria are very cheap (not sure if they always have been), for what look like very nice properties.

Of course, you would also have to learn the Cyrillic alphabet as well as the language itself :-)

Wherever you consider going - it is not easy being an ex-pat especially without other ex-pats around.
As time goes by you may well change your mind about the importance of the sun and decide you'd like to return, so do not buy anything which might be difficult to sell later, IMO.

#14 dipstick

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Posted 28 February 2012 - 07:35 PM

I think Bulgaria property has basically fallen through the floor now. I did speak to someone who had lived there for about 3 years. She said she liked it (but moved back!) but said the main problem was corruption.

I promise not to be lured into the countryside by an idyllic ruin - honest. I've lived very rural in the UK and now I've decided that wherever I end up I want to be within easy walking distance of some kind of civilisation. Maybe 3 or 4 kilometers from a reasonable sized town/village?
I think I've quoted him on here before but John McCrone said, "Romantisicm is essentially a spectator sport." I agree with him wholeheartedly.
And you're quite right, I've got to consider buying something that somebody else will want to buy at some point.

If you could point me in the direction of a few agents that deal with long term rentals in the central region I'd appreciate it.

Does it get very cold in the north? It's the one bit of Portugal that I rarely hear talked about, so presumed it wasn't popular.

#15 dipstick

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Posted 29 February 2012 - 06:28 AM

Phew! Not much available to rent that is suitable on the casa sapo site. Plus, it could drive you nuts checking out each small area only to draw a complete blank. Anybody got any ideas of easier sites to search I'd appreciate it.
Mind you, it did throw up the idea of looking at the property auctions in Portugal. Seems to be very popular at the minute!




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