By: NATASHA SMITH
DESPITE LAST year’s property crisis in Spain, where more than 100,000 people lost their jobs as half the country’s small real estate agents closed down due to a downturn in sales, the Algarve property market appears to be unaffected.
In 2006, around 40,000 of Spain’s 80,000 small estate agents were forced to close following a dive in sales over the last two years and industry experts believed that this signalled the end of the Spanish property boom, which has been a driving force for the country’s economy for years.
However, others believed that the industry was merely balancing itself out after the market became saturated with estate agents.
Former editor of The Resident, Brian Adams, has had many years of experience in the Spanish property industry and said part of the reason for the downturn is that “buyers are discovering other markets, including Eastern Europe” and with more affordable house prices, they are getting more for their money. “People have grown tired of the same old thing”, he said.
The property market and construction industry appear to be far more regulated in Portugal, Mr Adams said, adding “there was a free for all in Spain”.
“I don’t see why a domino effect should occur in Portugal. This problem appears to be indigenous to Spain”.
He also said that there is still so much green open space in the Algarve and local councils are preserving these areas. “If the Portuguese government has done enough in creating demand, the market will be in a strong position”.
The US Sub prime crisis and the subsequent credit crunch have made people reconsider their investments and hesitate about tying up money in property but Algarve estate agents believe that this will not affect the local property market.
They do believe that buyers are more aware of the potential problems and take longer to consider their options.
Carvoeiro branch manager of Winkworth, Sarah Roskilly, believes that the media has played an important role in publicising downturns, which have sparked fears of an international recession, but this is unlikely to have a detrimental effect on the Algarve, and Portugal’s, property market.
However, she added that one aspect that “could affect the property market is the strength of the Pound against the Euro”.
Anne Grogan from Portuguese Homes also said that the strength of the Pound could have an effect on the property market in terms of UK buyers but she told The Resident: “January started on a high note and this looks like it will continue”.
The many issues that are affecting global economic markets and property industries in several countries including Spain do not appear to be currently having a detrimental effect on the Algarve property market and agents say there is no evidence to suggest an imminent downturn in the market.
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