Portugal Property Faces Rough Year After 2011 Investment Slump
Portugal’s real-estate market probably will show little improvement this year after investment dropped by 66 percent in 2011, according to broker Cushman & Wakefield Inc.
“We should see more of the same next year because it’s difficult to obtain bank financing for real estate and there is a perception of risk in the market,” said Eric van Leuven, managing partner at the New York-based property company.
Real-estate spending in Portugal, which received a $78 billion-euro bailout last year, fell to 269 million euros ($341 million) in 2011 from 730 million euros the previous year, van Leuven said at a presentation to reporters in Lisbon today. Portugal’s economy is expected to contract by more than 3.1 percent this year, after falling by about 1.6 percent in 2011, the Bank of Portugal said yesterday. Fitch Ratings and Moody’s Investors Service both cut the country’s debt rating to below investment grade last year.
A decision by the government to ease century-old rent controls and the likelihood Portuguese banks will push harder to sell repossessed properties in 2012 may push prices down, creating a “good opportunity,” for investors, van Leuven said.
To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net
To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net
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