Portugal has been struggling since it requested a bailout from the EU. The government recently announced that this year’s budget deficit would reach 5.3% of GDP, exceeding the 4.5% target agreed under the bailout deal.
However it is thought inspectors for the International Monetary Fund and EU will take a lenient view, and the IMF has already said it will keep an open mind on Portuguese targets. Further austerity measures for the country could prove to be counter-productive as it has already stuck rigidly to an austerity programme.
This has brought the country praise, and optimism over its recovery is increasing. The economy is predicted to contract by 3% this year before growing by 0.8% next year.
Although much of Europe saw a property boom from the mid-90s until the beginning of the financial crisis, this largely missed out Portugal. The only years to see significant price growth were from 2003 to 2004 when prices rose by an average of 6.2%. Between 2005 and 2007, prices rose by just 1.25%, and prices have yet to fully recover from the financial crisis.
This means there are some real bargains around for those looking for an overseas property and Portugal will always be a popular year-round holiday destination. Even in the Algarve property prices are still below values seen before the financial crisis.
Experts also think there is a great deal of pent-up demand for rental homes in Portugal due to stringent tenancy laws that have discouraged landlords. Laws intended to invigorate the rental market were passed six years ago, but the system is still overcomplicated and weighted in favour of tenants.