More Bad News
Real estate prices are going down everywhere except Portugal
More Bad News
I guess where the US goes, the rest of the Western world tends to follow. Unfortunately the news doesn’t get any better. In the US new-house permits are at a 31-month low, down 30% from a year ago. Existing house sales have fallen for 11 months in a row; year over year; it’s the 2nd largest decline on record. And now, the sale prices are headed down. They’re off 11% so far. This, of course, is just the beginning.
Real retail sales (after inflation) have gone down for 3 years in a row. Savings rates have fallen to a near-record low. And in the last quarter, consumer debt increased at the fastest rate since 2007. Now, there’s $16 trillion of it – a new record.
Back over in Europe we have slightly different stats. House prices are down in Spain, with large swathes of previously-owned holiday complexes empty, but in the Algarve prices are still rising, but a lot more slowly.
The news I get from the UK is that things are just getting worse and worse on every front. I hear there are distribution places for free foodstuffs for those on low incomes. Will there be soup kitchens next? Doesn’t sound like house prices will be going anywhere but down under those conditions.
With lame duck parties in Westminster, and not much alternative outside it looks as though things are going to remain bad for quite some time.
However, while in Northern Europe all is doom and gloom, the real estate market is still rising in Portugal.
Last year Sotheby’s found that North Americans were top of the list of foreign purchasers, and that trend seems to be ongoing.
Despite inflation hovering around 10%, and low wages, the real estate market seems resilient, basically because of a flood of foreign buyers. Interest rates are still low across the EU but the real problem is a lack of properties to buy. The local stats are quite amazing. 21% of homes purchased in December were sold within a week. That is remarkable. 15% were sold between two weeks and a month, while 21% were sold between one and three months.
Perhaps Portugal is the place to be after all.