Easy to count in head: housing in Portugal costs €1,000 per sq.m

Over the last five years housing prices in Portugal dropped by more than 10%. In September 2008 houses and aparments were offered for €1,145 per sq.m, in spring 2010 this figure reached its maximum of €1,178, while throughout this year is was around €1,000. During this five-year period the most affordable housing, mainstream and luxury real estate fell in price more or less equally.

With all the evidence that the real estate in Portugal is underestimated, experts differ in their forecasts on further development of the market.

Faro cityscape

Some realtors announce a significant increase in sales to foreigners wishing to obtain a "golden visa" to Portugal. Residence permit has been granted to more than 300 foreigners who've bought property in the amount of €200 million. Recall that to obtain a residence permit in Portugal one has to invest at least € 500,000 in real estate.

Other market experts are not so optimistic. They remind of a large number of second homes whose owners are no longer able to make mortgage and tax payments, and therefore are trying to sell their homes at bargain prices.

Rossio square in Lisbon

Property prices in regions of Portugal

According to NUTS II, Portugal is divided into five major economic and statistical regions - North, Centre, Lisbon, Alentejo and Algarve. The most expensive residential real estate in Portugal is concentrated in the Lisbon region (€1,315 per sq.m in its northern part and €1,045 in the southern), on the island of Madeira (€1,245), as well as in the Algarve, in the very south of the country (€1,240).

Algarve is, in fact, a very provincial place, consisting of a small resort villages. In the largest city in the region, Faro, there are only 65 thousand people. What does attract  real estate buyers in the Algarve and Faro?

This is a resort area with many opportunities for a good leisure: there are beaches with cafes, restaurants, night clubs etc. Algarve is one of the warmest places not only in Portugal, but also throughout Europe. It's comparable with climate of Sicily, Crete and Cyprus. Owners of real estate in the south of Portugal, who are bored with holidays and eternal summer, may change the situation and go up to Lisbon or Seville which are located 150 km to the north and east respectively.

The average housing price in Algarve is €1,240 per sq.m. At the same time, a square meter in 25%  cheapest houses and apartments goes for €873, in 25% most expensive - for €1,811.

Beach in Algarve

The Lisbon region is attractive doubly, because it's not only the capital, but also a seaside resort area. Real estate in the suburbs of Lisbon, Cascais and Estoril is popular among the Portuguese and residents of other countries who buy second homes there. Price per square meter of real estate in the Greater Lisbon is €1,315. Housing in the urban area of Lisbon costs on average €1,224 per sq.m.

The cheapest properties in Portugal (up to €900 per sq.m), are located in the Northern and Central regions, slightly more expensive housing can be found in Alentejo.

Houses in Portugal are cheaper than apartments

Houses in Portugal are about 10% cheaper than apartments and cost just €948 per square meter. The most expensive offers are on the coast from the capital region to the border with Spain. By the way, this area has the best climate: on the coast to the north from Lisbon, as well as in "internal" subregions in the North-East of the country, winter is not so warm. Buy the most expensive and luxury villas in Portugal can be found around Lisbon and in Algarve.

Where to buy an apartment in Portugal?

How much are apartments in Lisbon, Porto and other major cities in Portugal? Surprisingly, but the most expensive city apartments are in city of Coimbra (€1,262 per sq.m).

One square meter of apartments in Lisbon can be purchased for €1,217. Cheapapartments in Lisbon go for €783, luxury apartments go for €1,955 per sq.m.

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Apartments in the south of the country, in the cities of Évora, Beja, Portimao, Faro are more expensive than on average in Portugal. The cheapest apartments are located in northeastern cities such as Guimarães, Viseu and Guarda.

Surprisingly, in Porto, the second most populous city in the country, the price of residential property is lower than the national average. Housing in Porto costs €937 per sq.m and it's by €190 less than in February 2010.

Properties in France: prices in Paris, Marseille and the Cote d'Azur have declined

In Q2 2013, prices on the secondary real estate market in France remained by 1.1% lower than in the same period of the last year.

The crisis hasn't spared even Paris: according to the October French property market report, moving to the capital costs by 1.2% lower than a year earlier. Apartments in the largest city of the Fifth Republic depreciate slightly faster than houses. In the regions, on the contrary, houses fell by 0.9%, while apartments fell by 1.3%.

However, if we compare it to Q1 2013, instead of y.o.y, residential property prices in France increased, but just by a few tenths of a percent.

Secondary market : Apartments

Let us recall that France has 27 regions (21 on the continent, one in Corsica and 5 in the overseas territories), which are divided into 101 departments . In two thirds of French departments prices for existing apartments had fallen. The largest fall was in the northern department of Pas-de-Calais (by 10.7%).

As for apartments in major French cities, the largest decline in prices for secondary housing was observed in Saint-Etienne (-8.8%, to €1,090 per sq.m), Amiens (-7.1%, €2,070) and Limoges (-6.8%, €1,180) . Apartments now cost a bit less on the Cote d'Azur and next to him: in Nice (-6%, €3,510) and Marseille (-5.9%, €2,320). As already noted, an apartment in Paris also costs less than a year ago.

Among leaders of growth are: Clermont-Ferrand (+6.6%, to €1,710 per sq.m), Lyon (+5.1%, €3,330) and Strasbourg (+4.7%, €2,400).

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Secondary market: houses

Prices of existing houses fell last year in half the departments. As for the cities, the most dramatic decline was observed in Limoges - by 15.7%. The average price of a house in the city amounted to €135,5 thousand, making it one of the lowest in major cities. In the mentioned Amiens the decline amounted to 10.9%, and the average cost of a house fell to €146,5 thousand (assuming it's almost a suburb of Paris, only in 120 km from the capital). Houses became more affordable in Brest, Lille, Saint-Etienne and Dijon.

By the way, as for major cities in France, the lowest average price of houses was recorded in the small Chateauroux (pop. 50K). The average house there is offered for sale for €120 thousand, despite the fact that you can get from Chateauroux to Paris by TGV in just a couple of hours. By car, you can quickly get to Tours, Poitiers, castles of the Loire.

But the buying a house in Nancy and Metz, located in the north-east of the country, on the border with Luxembourg and Germany, this year will be more expensive. Distance to Frankfurt and Stuttgart from there is the same as to Paris.

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Primary Market

The primary market has declined even more. The average price per square meter ofapartments in France fell by 2.6%, of houses - by 3.2%.

It is noteworthy that the prices of new apartments fell not only in a relatively "cheap" north-eastern regions of Lorraine and Franche-Comté, but also at the elite southeast (Provence-Alpes-Cote d'Azur), and in the Paris region of Ile-de-France. And although in the latter two regions new apartments are approximately 5% cheaper than a year ago , prices are still the highest in the country: €4,085 and €4,696 per sq.m, respectively.

New apartments became significantly (by more than 7%) more expensive in the regions of Poitou-Charentes, Champagne-Ardenne and Limousin.

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Sales

For the year ended in June 2013, 677 thousand secondary properties were sold, by 13% less than in the previous period. However, if we look at the trend of recent months , sales are rising. In Q2 by 10% more secondary housing was sold in Greater Paris than a year before, and by 18% more in regions.

Builders are willing to 101 thousand of new properties. So that there is 10% more newly built houses and apartments on the market than a year ago. However, the number of sales in 2013, hasn't reached the last year figure.

It is expected that in this year in France only 645 thousand properties will be sold. In 2012 it amounted to 709 thousand, and in 2011 - 808 thousand.