But it is overseas investors who are keeping the real estate market ticking over with foreign investors spending the most money while national investors completed more deals, the Investment Portugal Market Review report from CB Richard Ellis has found.
The main investors were from Saudi Arabia, Germany, France and Spain. UK investors are deserting Portugal due to the credit crunch.
'In the first half of 2008 foreign investors registered strong activity in the Portuguese investment market when compared to national investors, being responsible for nearly 71% of total investment turnover,' the report says.
'These numbers reveal the existence of a major trend by foreign investors to acquire large assets,' the report also found.
Total investment turnover in the first half of 2008 was €481 million, a decrease of 13% compared with the same period last year, and 35% compared with the previous semester of last year.
A major €185 million investment in the tourism sector involving JJW Hotels and Resorts, two hotels and a golf course in the Algarve, prevented too much of a slump, the report says, but if this is taken out of the equation then investment levels were significantly lower.
The report concludes that the general economic downturn will continue in Portugal, in line with the rest of Western Europe. 'In consequence the real estate investment market is expected to present a weak performance in the months ahead,' it says, adding that many investors are expected to adopt a 'wait and see' attitude.
