Portuguese banks are lending the most money to homebuyers since the nation received an aid package in 2011, fueling a recovery in a property market that has been dominated by international investors since the financial crisis.
New mortgages surged almost 52 percent to 1.29 billion euros ($1.42 billion) in the five months to the end of May, compared with the same period last year, according to Bank of Portugal data. That’s the most since 2.9 million euros of home loans were granted in the first five months of 2011, when the country sought a bailout from the European Union and the International Monetary Fund. The aid program ended last year.
“The bailout period left many Portuguese out of the market because banks stopped lending,” said Nuno Durao, the Lisbon-based head of real estate broker Fine & Country. “Foreigners have been the main drivers of the real estate market in recent years, but there are signs the Portuguese are returning.”
Overseas buyers accounted for 90 percent of the 730 million euros invested in Portuguese real estate last year, almost three times more than in 2013, according to data compiled by Aguirre Newman SA, a real estate consulting company in Lisbon.
Portugal house prices rose 0.8 percent in the first quarter, the sixth consecutive quarterly year-on-year increase. The number of real estate transactions in the first quarter rose 38.3 percent to 25,716, the highest level since the fourth quarter of 2010, according to the National Statistics Institute.
About 76 percent of households in Portugal are owner occupied, according to Vitor Reis, head of the Institute for Housing and Urban Rehabilitation in Portugal, which seeks to provide housing for families at affordable rents.
“Portugal is among the EU countries with the least number of people renting homes,” said Reis.