Crisis felt in Algarve holiday home rentals

Despite positive results predicted by tour operators for the tourism industry in Portugal this summer, a crash in the Algarve’s holiday rental market has been felt this year, even more so than in 2012, according to sources related to the sector.

A real estate entrepreneur in charge of 45 holiday properties in the eastern Algarve told Lusa news agency that the decrease in demand was nearly 50% compared to the previous year.

“Last year it was already hard enough to rent homes to tourists, but this year the crisis was felt to a much larger extent and we still have empty properties in August, which three or four years ago would have been unthinkable. Since most people have not been paid their holiday bonuses this year, it was even harder for potential clients to meet the asking prices,” said the entrepreneur, who preferred not to be identified for fear of being targetted by the tax authorities, as many rentals are being conducted illegally.

“We noticed there was some demand in August but the prices asked by the owners were not easily accepted by tourists looking for a holiday home,” the entrepreneur stated, stressing that some families get together and rent a two-bedroom apartment for eight people in order to spend less money and enjoy a few days rest in the Algarve.

He said that 30% of this month’s real estate offering in the region was unrented and advised owners to lower their prices next year if they do not want to be left with empty properties.

Another entrepreneur, Jaime Saraiva, from the Portimão/Praia da Rocha area, also underlined difficulty in renting holiday homes this summer and said he preferred to negotiate with the owners in order to convince them to ask for realistic rental prices.

“There was one person who wanted to rent a two-bedroom apartment, for which the owner was asking €750 per week, but could not afford to pay more than €400 or €500. In previous years, this offer would be refused because someone else was bound to pay the asking price, but this year that was not the case,” Jaime Saraiva told Lusa.

He believes the predictions for this year are not good because property owners are unable to profit on levels to which they have been accustomed in the past, and clients are also refusing to pay high prices on properties whose owners do not declare their income to the tax authorities.