Last October the mood in the eurozone was at its lowest. The crisis appeared to be deepening, the politicians seemed to be all but powerless to avoid the situation worsening, an unplanned break up of the eurozone was on the cards and financial markets were floundering.
Thankfully this year has brought small, but significant, changes. In the UK, the FTSE100 has strengthened since its October 2011 low, European equity markets have shown significant improvement, the American economy is on the mend, the Greek saga appears to have been dealt with at least for the time being and there is a general feeling of moving forward with guarded optimism.
For the Algarve property market these improvements are important but it is to the UK that many developers and agents look for prospective purchasers.
Despite gloomy UK unemployment figures, the services sector, manufacturing output and business confidence have all improved during the first part of 2012.
Doom and gloom stories always make headlines and it is certain that the Portuguese economy has a very long way to go before it is out of the woods – but it must surely follow that with growth in America and developing economies and the risk of a eurozone and UK meltdown diminished – we will see renewed interest in property purchase as the year progresses.
With the downturn in the property market over the last four years, purchasers have been able to drive hard bargains and that continues to be the case.
Indeed, purchasers have taken control of values and that can be considered in a positive light.
Sellers can no longer be delusional about the value of their property – if they want a relatively quick sale then the price must reflect this. This is very apparent when we look at sales in resorts where properties are very similar – sales invariably go in order of price – the less expensive going first.
This does not mean that all the properties of the same type in any resort should be priced the same – it simply reflects which owners want a quick sale and which owners are prepared to wait until the market recovers.
Inevitably, the economic downturn over the last few years has resulted in banks repossessing properties where owners have been unable to meet mortgage payments.
Repossessed properties are now available directly from the banks and, in some cases, the banks involved are offering very attractive finance options – some specifically designed to suit non-residents.
This is a solution which not only benefits the banks, but will give the property market a timely boost.
Despite the difficulties of recent times, the Algarve remains one of the most popular European destinations for the purchase of holiday and retirement homes.
Although we hear stories of expat retirees moving back to the UK because of the exchange rate and other reasons, there are very many retirees in the UK considering moving abroad.
While 2012 continues to see buyers looking for a good deal, clients are undoubtedly becoming more discerning in their selection of property.
Properties are not being considered just because of the price, the buyer is looking for a quality property no matter at what level they are buying. Certain areas are more in demand than others and it is noticeable that well run, well maintained resorts with good amenities are experiencing renewed interest.
Most sales are currently to ‘cash buyers’ – but this should not put off those requiring finance. Mortgages of up to 60% (more in some cases) are easily available. Many purchasers have substantial savings, but nevertheless finance is always worth considering.
Property investment is not suitable for everyone and we recommend that advice is sought before making any commitment. As an independent financial adviser, we seek to ensure that clients receive advice suitable for their circumstances.
This facility is not suitable for all expatriates, and we recommend that advice is sought before one makes any commitment. As an Independent Financial Adviser, Blacktower seeks to ensure that our clients receive the advice suitable for their specific circumstances. Please contact Linda Kenny F.C.A International Mortgage Adviser for further details 289 355 685.
Blacktower Group has offices in the United Kingdom, Gibraltar, Portugal, Spain, France and Italy. Blacktower Financial Management (International) Ltd is licensed in Gibraltar by the Financial Services Commission (FSC) License No. 00805B Blacktower Financial Management Ltd is Authorised and Regulated in the UK by the Financial Services Authority.