News: Portugal 'cheaper than Spain' for retirees

Thu, 29 Nov 07

Portugal is one of the most popular overseas retirement markets for Brits...

Every buy-to-let investor looking for property overseas has to work out first what market they are aiming to serve. Some will look for property geared up to short family holidays, others to houses that will function well as residences for longer parts of the year. Nearby facilities will play a part too, with differing leisure, work, transport and other considerations needing to be taken into account.

In the case of Portugal, there is a similarity in many regards to Spain, both because of the shared Iberian locality with sunshine and sea, but also through the popularity with holidaymakers and the growing golf tourism market.

This perception certainly has some truth in it, Ewan McGarrie, chief executive of London based brokerage and advisory service propertyinvestment.co.uk, has said. In particular, he noted: "The Algarve is known as a lifestyle destination and there are a lot of golf courses there and a lot of expensive property."

Lifestyle destination

Portugal has always been a lifestyle destination, Mr McGarrie explained, with those investors entering the country's property market in order to take advantage of a high level of capital appreciation passing through that period between 2000 and 2004.

"There was always a tradition in Portugal for the seller to under-declare that selling price but that has gradually been eradicated as a culture," Mr McGarrie noted, but said this had changed as golf course developments had come to dominate in many areas.

Despite this, however, there was still a great appeal to the country, due to its many resources and natural attractions: "Portugal has beautiful beaches, great countryside, there is culture and architecture and there's Lisbon as well, which is just fantastic."

Moreover, stated Mr McGarrie, the comparative levels of development in Spain and Portugal meant there were more bargains in the latter due to lower levels of development, meaning "a lot of property prices in Portugal are cheaper than Spain".

Little risk to investors

One particular market which is doing well is the retirement home sector. Earlier this month homesworldwide.co.uk reported that a Saga survey identified Portugal as the third most popular overseas retirement market for Britons. Sarah Wood, author of Retirement Property 2007, told homesworldwide.co.uk the country not only had plenty of facilities for older people, but also a thriving ex-pat community, plenty of flights to and from Britain and no inheritance tax if the property is left to Britons.

Most of all, she said: "Portugal has an established property market that poses little risk to cautious investors," which helps it compare favourably with many other locations which might have sneaked in behind France and Spain as popular retirement destinations.

Thus Portugal, while not having the boom appeal of 2000-04, still has a very definite niche, one which should permit property owners plenty of reason to invest in more than one country in the Iberian Peninsula.

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