Average bank valuations for properties in Portugal increased again in August with the price per m2 now at its highest level since July 2012. Rises in the north of the country outstripped other regions.
The Algarve has the highest valuation levels in the country at €1,246 per m2 against an average national value in August rising by 1.9% year-on-year to €1,032 per m2, according to data released by the National Statistics Institute.
This is the highest national level since July 2012 after which prices slid to below €1,000 in early 2013, the lowest figure since records began.
The largest increase was experienced in the north of the country (2.4%) but some areas saw year-on-year declines this August, e.g. in the Alentejo (-2.3%), the Azores (-4.3%) and Madeira (-8.8%).
These valuations are essential for those trying to buy a house using a mortgage from one of Portugal’s banks which as a group still are receiving criticism for tight controls on lending as they work on improving their balance sheets.
The banks claim to offer up 80% of their property valuations. By undervaluing properties banks further increase the loan-to-value ratios, making their position more comfortable but losing many customers unable to fund the gap.
The Algarve continues to lead the country in price per m2 with an average valuations across the region running at €1,246 which is a healthy 21% above the national average.
The opposite side applied in the rural centre of the country in August where the average valuation was just €851 per m2, 17.5% less than the national average.
