By Bart van Linden [email protected]
Bart van Linden is a director of Exclusive Algarve Villas, a local real estate company focused on selling high end properties and investment related real estate throughout Portugal.
For investors, the current times are a nerve wrecking experience with large fluctuations in the currency markets and stock markets. Gains and losses of 5 to 10% per day are now more the norm rather than the exception.
For cash rich investors the collapse of the banking system has become a worry as most banks won’t guarantee for more than €100,000 per bank account in case the bank goes under.
Who could and would have imagined this scenario just a few years ago – a bank going bankrupt?
In our market, where we serve the top middle and high class buyers, this is the talk of the day and many don’t have an answer (and/or solution) to basically what to do with their money. Most of them have lost a lot of money on the stock markets already and are looking for alternative options to safely ‘park’ their money.
Although it might sound strange, Portugal is actually still one of the safest places to invest in real estate in Europe. The banks are in decent shape and the average drop in real estate prices has held up very well, considering all other variables the country has to deal with.
In the Algarve, we have seen larger fluctuations as we have mainly foreign owners who might want to buy or sell for different reasons. In short, there are deals to be made at the moment.
We have seen an excellent year of property sales in the +€600,000 section of the market; many buyers and future buyers are looking to combine investment plus lifestyle.
The crisis in Europe and double dip recession has put us in a completely different perspective than a year ago when a ‘quick’ exit was more visible.
Current reality is that most countries in the EU-zone might go back into recession next year, as well, of course, Portugal. So what will 2012 bring for real estate in the Algarve?
We believe the current trend will continue with cash rich buyers purchasing bargains in well located positions in the Algarve. We feel that coastal properties, which are realistically priced, will remain the most attractive for the buyers coming to the Algarve.
Pricing will be item nº1 on the shopping list and buyers will be looking throughout the Algarve to find the deal at the right price. Location is as ever important and the golden triangle as well as Carvoeiro and Lagos/Praia da Luz remain attractive for buyers.
We have noticed a drop in properties located inland and again here the price will determine the attractiveness for a potential buyer.
If you want to sell, it all comes down to pricing – at the right price it will sell.
P.S. Recessions don’t last forever and some opportunities will be ‘once in a lifetime’ deals … be ready!