In Portugal as elsewhere the property market is changing, the credit crunch has changed the way we will interact with banks and indeed the way that banks interact with each other forever. While the property market has not seen the huge swings that other countries have experienced, there is a definite shift downwards and people who have cash are seeing opportunities in the rural areas of Portugal.
In addition to the cash rich investors a number of people who had pulled out of purchasing property in the last few months are looking again with revised budgets, mostly revised down of course, but they are also looking at different types of property. More and more people are looking at rustic land where building permission is highly likely to be approved, but perhaps not certain, hence they can negotiate a cheaper price.
One has to suppose that they are taking the gamble, slight though it is to hedge against any loss of value that may occur and perhaps also the value of the pound against the euro, as indeed the majority of the foreign people looking at Portuguese property are British. There is also evidence that the large investors are on the hunt for bargains, many of the large investment projects had priced themselves out of the market during the rush for golf courses and large luxury housing developments, but of course recent events have pushed a sense of reality to the fore and far more realistic prices are tempting the larger investors back to Portugal.
The other important fact to note is the infrastructure improvements that are happening in Portugal, an ambitious road building program is linking up the country like never before and a high speed rail link from Spain offers an alternative route to Europe, couple this with a brand new airport south of Lisbon and you have a mouth watering proposition.
The Portuguese government have introduced a raft of incentives they have lowered vat and have joined in with the bank bailout strategy they are also putting in place depositors guarantees. They have also pledged to lower business taxes and to further reduce the difficulty of setting up a business.
Some councils have gone further and are offering cash incentives to couples moving into the area, in particular the council of Penela a picturesque town in central Portugal are offering a cash incentive for couples under 35 to buy a house in the area. The property in Penela is therefore becoming much sought after.