Categorized | International

Housing Market in Portugal Continues to Struggle

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Residential real estate sales once again declined during the month of October in Portugal. The nation’s housing market has declined in the past few months, and the trend looks as if it will continue. The most recent report indicated that both supply and demand declined, as did the number of overall sales and prices.

While prices fell in the month of October, their decrease was not as substantial as it could have been. Limited supply help prevent an even bigger decline in pricing. Because overall consumer confidence in the housing market is down, many analysts believe that the declines in the residential real estate market will continue for months to come.

Portugal, like other European nations, has been hit hard by fears of a debt crisis. Banks have tightened credit to the point that it is nearly impossible for the average family to secure a mortgage loan. As such, there are fewer prospective homebuyers than ever before in Portugal.

Although the housing market is coping with a decline, the rental market is thriving. Those families who are unable to secure a mortgage loan are instead opting to rent. As such, demand for rental properties has soared through the roof, driving up prices in the process.

Analysts expect that rentals will continue to gain more of the market share in the coming months. Credit restrictions are likely to remain in place, and overall economic uncertainty will likely lead many people to stray from any potential investment risks. Rent prices are thus expected to rise yet again in the coming months.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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