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Portugal property continues to lure foreigners

Monday, 02 February 2015 00:00 Published in Commentary

LISBON — Portugal s property market continues to expand at double digit rates thanks to foreign buyers, including China’s new wealthy, despite a corruption scandal over visas used to lure in rich non-Europeans.

More than one in five residences sold in Portugal last year was bought by a foreigner, according to provisional data by the Portugese Real Estate Agents Association.
Britons were in top place among the 23,000 buyers, followed by Chinese and French.
“The property market grew by between nine and 15 percent in 2014,” said the head of the association, Luis Lima.
“If it hadn’t been for the Banco Espirito Santo debacle and the golden visas scandal it would have been 25 percent,” he added.
The collapse of BES amid suspicions of multinational accounting fraud and the visa scandal that saw senior officials resign raised concerns about the integrity of the market.
However Portugal s warm climate, low property prices and tax breaks for European retirees continued to pull in many buyers.
“We’ve seen a small drop in demand from the Chinese since the visa scandal in November, but the number of French moving into Portugal has exploded,” said Miguel Poisson, director of the ERA real estate agency network in Portugal.
In fact Portugal has now dethroned Morocco as the top foreign destination for French retirees.
Serge Pasquier, a 75-year-old former businessman was among the 3,680 French buyers in Portugal last year.
“I sold my furniture store and my 90-square-metre (970-square-feet) apartment in Saint-Mande outside Paris and bought a 300-square-metre apartment with an ocean view near Lisbon for much less,” he said.
“The climate is very nice, the cost of living is considerably less and you feel safe. I don t regret my choice,” said Pasquier, who is married to a Portuguese woman.
Not only is the climate attractive, but the prices are as well. Property prices slumped by a third after Portugal was tripped up in the eurozone debt crisis and needed to be bailed out by the EU and IMF.
The 78-billion-euro loan came with unprecedented austerity measures that slashed public sector salaries and pensions while raising taxes by 30 percent. As unemployment soared to 17.5 percent in 2013, the property market was in a morose state.
Foreign retirees are not the only ones who have taken advantage — Chinese and Brazilian investors have as well.
But the flood of foreign buyers has also “helped increase the prices of nice apartments in Lisbon and the Algarve” region along the southern coast, said Pascal Goncalves, head of the Maison au Portugal real estate agency.
The Chinese, like the French, have a taste for houses with pools in the coastal resort town of Cascais just a short drive from the capital Lisbon, as well as seaside villas in the south of the country.
But their tastes diverge when it comes to Lisbon: the French opt for renovated apartments, preferably with a view of the Tagus river, while the Chinese choose new apartments in ultramodern buildings.
Portugal has been trying to lure in China s new well-off class by offering them residence permits that allow them to travel freely throughout most of Europe.
Under the scheme, foreign investors buying property worth 500,000 euros ($566,000) or more and keeping it for at least five years receive residency rights in Portugal.
The residence permits, dubbed “golden visas”, also allow their holders to travel without visas throughout the 26 European nations in the borderless Schengen zone.
Since its launch, the scheme has raked in more than 1.2 billion euros. A total of 2,022 golden visas have been granted, mostly to Chinese nationals.
However that program received a serious setback in November when 11 people including senior officials were arrested as part of a corruption and money laundering.
They were suspected of colluding to inflate prices so properties would qualify for the golden visas. Several Chinese filed complaints they were duped.
“When there is a lot of money in play the temptation to enrich oneself is great,” said Domingos Amaral, an economics professor at the Catholic University of Portugal.
He doesn’t believe the scandal will damage property investment in the long term, a view shared by real estate agents.
“The visa scandal has certainly slowed the recovery of the market and harmed investor confidence, but real estate should continue to stimulate the Portuguese economy in 2015,” said Lima. AFP

An eight-year-old girl and three men — one with his hands bound — were among those killed in a botched anti-terror police operation in Maguindanao last weekend, a local official yesterday said.
Mamasapano town Mayor Benzar Ampatuan said residents had told him police tied up the man to stop him from  tipping off their targets ahead of the pre-dawn raid in which 44 commandos died in one of the force’s bloodiest days in recent years.
A local farmer’s daughter and two other men were also found dead in their homes after the fighting, Ampatuan said, the first report of civilian casualties in the bloodbath.

“Their wives said they were hit in the crossfire,” he told Agence France Presse, adding five other residents of the corn-farming region were also wounded.
The government last Friday held a national day of mourning for the dead police officers, who were killed as they hunted the man blamed for the 2002 Bali bombings in Indonesia, in which 202 persons died.
Nearly 400 members of the Special Action Force were sent to a village near the town of Mamasapano last January 25 to arrest Zulkifli bin Hir alias Marwan.
The Moro Islamic Liberation Front said 11 of its fighters were killed and 15 wounded in the gunfight that ensued. A second rebel force, the MILF splinter group Bangsamoro Islamic Freedom Fighters, has not disclosed whether it suffered any casualties.
Security officials said Zulkifli was killed by the raiders, a claim that has yet to be independently confirmed. A second target, Filipino militant Abdul Basit Usman, escaped.
The government has faced calls for retribution after at least one police survivor alleged some of the policemen were killed after they surrendered and their corpses were desecrated.
Despite the bloodbath, both the Philippine government and the MILF pledged at the end of the Kuala Lumpur talks on Saturday to pursue their 2014 agreement.
The process calls on parliament to pass a law giving minority Muslims self-rule over several provinces and for the 10,000-member MILF to disarm gradually.
The accord aims to end decades of armed conflict that had claimed 120,000 lives and kept Mindanao in abject poverty and lawlessness.
 AFP


Madrid — Spain’s Catholic Church, which has long been accused of silencing cases of priests sexually abusing children, is starting to take a hard line against offenders, spurred by Pope Francis.
A judge in the southern city of Granada on Tuesday charged 10 priests and two Catholic lay workers with sexually abusing altar boys in their care, or being complicit in such acts, from 2004 to 2007.
It is the biggest and most serious pedophilia case involving members of the Catholic Church known so far in Spain.
The case was brought to light by a former altar boy, now 25 and a member of the Catholic institution Opus Dei, who wrote to the pontiff to say he had been molested.
Pope Francis called the unidentified man to offer the Church’s apology and in November the pontiff said he had ordered a church investigation into the case, saying it had caused him “great pain.”
The young man who wrote to the pope “never imagined the issue would take on the significance that it did,” his lawyer, Jorge Aguilera Gonzalez, told AFP.
“If it wasn’t for the pope’s intervention, it would still have been an important issue, but just one of many.”
Pope Francis has taken a tough stance on clerical child abuse since taking over in 2013 from Benedict XVI, calling it “the shame of the Church.”
The Catholic Church had huge influence in Spain during Francisco Franco’s 1939-75 dictatorship and for decades victims kept quiet about abuse “due to social pressure, the power of the Church,” said Jose Manuel Vidal, head of religious news Web site Religion Digital.
That explains why, unlike in Germany, Ireland, Mexico or the United States, until now no major cases of pedophilia involving priests have come to light in Spain even though abuse took place.
Nine percent of all sexual abuse suffered by boys between 1950 and 1970 was carried out by priests, according to a 1994 study by University of Salamanca psychology of sexuality professor Felix Lopez for the Ministry of Social Affairs.
The abuse often took place in boarding schools, as depicted in Oscar-winning Spanish director Pedro Almodovar’s 2004 film “Bad Education.”
Social change. Spain has become an increasingly secular society since the country returned to democracy after Franco’s death in 1975.
Of Spain’s 33 million who declare they are Catholics, 61 percent say they are non-practicing, according to a November survey by the state Sociological Research Center (CIS).
“Now some bishops have changed, they have turned towards Pope Francis’s new era,” said Vidal.
“Others are lagging behind what the pope is asking for, which is total transparency and that pedophilia be considered by bishops themselves not just as a sin, as it has been up until now, but also as a crime,” he added.
While priests accused of abuse have often remained in their posts, the Archbishop of Granada, Francisco Javier Martinez, removed several priests linked to the case from their duties as soon as the scandal broke.
Still some voices, even within the church, called for Martinez himself to step down.
“Given that every day the opinion grows that he acted to cover up the alleged pedophiles, we think he should be removed,” Catholic group Comunidades Cristianas Populares de Andalucia said in a statement.
The archdiocese of Granada denied any cover-up and the priests accused over the alleged sexual abuse say they are innocent, according to their lawyer.
After the scandal broke in Granada, other victims of abuse have come forward with complaints and bishops have responded with a tough stance.
At the end of November, a 45-year-old man alleged he was abused in 1982 at a seminary in Tarragona in northeastern Spain when he was 11 years old.
After living with the secret his entire life, the man said he was encouraged to come forward by the pedophile case in Granada.
The Archbishop of Tarragona immediately launched an investigation, informed the Vatican and encouraged all victims to file criminal complaints.
The following month the diocese of Tui-Vigo in northwestern Spain abolished a religious order after its founder was accused of sexual abuse and detained by police.                  AFP
“Things are changing,” said Juan Pedro Oliver, the president of children’s rights association Prodeni.
“But it is because of the attitude of the pope. I think if it was up to the Spanish Church hierarchy this would not be the case.” AFP

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