Despite the wider economic doom and gloom, realtors in Portugal are gearing up for a bumper summer as reports based on current data from hotel chains and airline operators suggest holiday bookings are expected to be comparable to pre-crisis figures seen in 2007.
Stephen Anderson, Managing Director of Portugal based real estate agent Infinito Real, believes the increased tourism could be the catalyst needed to revive the market with cash buyers being the main investors in property.
He said: “Demand for rental property this summer is already high and historically those renting have been interested in buying something similar for themselves. With the prices the lowest they’ve been for years, it’s an opportune time and could be pivotal in kick-starting the property market again.”
Infinito Real has also recorded approximately 15% more buyers year on year so far in 2011. “Buyers are starting to turn a corner and realise that prices are unlikely to fall further and that the time to buy is now for the best bargains,” Stephen Anderson said.
However, the decline in the availability of finance has made the completion of these sales increasingly difficult and the latter months have seen a huge rise in cash buyers jumping in before the summer. They are able to obtain even better prices as there is no need for a lengthy completion for the developer.
Before this year, the ratio of mortgage to cash buyers was around 75% to 25%, and now the opposite is true with 25% looking for a mortgage and 75% of purchasers being cash buyers. “Vendors who may have been holding off selling during the downturn should be looking at this as the perfect marketing opportunity,” he said.
“Not only can they make the most of the high rent ability factor during the summer months, which is almost guaranteed due to the influx of tourists, but they should also use the greater number and more diverse range of viewers opting to holiday in Portugal as an opening to ‘show-case’ their property. It’s a chance to sell a ‘lifestyle’ which many experience while on holiday and, subsequently, choose to buy into on their return.
“We would hope that after June, now that the bailout has been approved and funds are being prepared to be released, the restrictive limits on non-resident mortgages will ease, making lending more freely available and giving others looking to purchase homes in Portugal the ability to do so.”
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