HOUSE PRICES in Portugal have plummeted by a staggering 15-20 per cent this year as fears grow that the country is facing a mini recession.
However, part of the problem is not just the crisis affecting the construction industry in Spain and Portugal, which has wiped millions off the shares of leading construction companies in recent weeks, but the glut of available properties outstripping demand.
Properties in Portugal that are most difficult to sell are those valued between 150-300,000 euros while small one-bedroom apartments worth between 80,000-120,000 euros are far more likely to shift.
Portugal’s increasing divorce rate is also in part responsible for making it easier to sell T1 apartments.
The credit crunch and reduced consumer confidence too means that Portuguese banks are shy to lend money to house hunters while those who can move are sitting tight and awaiting better economic times.
Part of a global trend, the United Kingdom is said to be facing recession with house prices plummeting by 6 per cent since the beginning of the year – the biggest fall since the early 1990s
In the United States house sales have consistently fallen since the start of the year with falls of 2.5 per cent in May alone – to the lowest in 17 years.
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