Text by ONE Select Properties
Post pandemic years presented a boom for real estate all over the world, and served to enhance further the secure investment that can be found in these physical assets. Particularly those designated as luxury properties in luxury condominiums aimed at niche markets who, in this case, have consistently seen appreciation in their Golden Triangle purchases, and in other resorts alike.
Despite the global economic upheaval predicted for the coming years, expert financial portfolio managers remain confident that real estate purchases will continue to deliver profitable and stable results. The past couple of years have restored buyer confidence, and even more so for sellers given many saw assets double in price while, in the meantime, benefiting from either residence/ holiday in the property itself, or great rental yields. Luxury real estate, in particular markets all over the world, have strongly withstood decades of unstable financial markets and proved to be of enormous safe haven value. Real estate, especially in Quinta do Lago, Vale do Lobo and Vilamoura has granted all buyers a ‘cash cow’ asset that will seldom decrease in value, which is a rare find in the financial world.
Low volatility and risk, coupled with high profitability is the formula behind luxury real estate purchases, but could 2023 present challenges to this sure investment? One of the trends noticed worldwide, regardless of price tag, has been the shortage in properties available on the market, resulting in an increase in price for those available. Consequently, potential sellers cannot find an equal investment, both in price and quality, compared to that which they already own and choose to maintain the asset. What could perhaps break the cycle is a change to current pricing offer. When discussing the current market conditions with other colleagues the sentiment is that properties in the range of €1M – €6M could continue to increase in value, where those in the higher end of the luxury pricing scale could present some steadiness in listing value.
Two other trends were noted to further potentially impact the real estate year of 2023. Following obligated indoor confinements and a subsequently aiming to change lifestyles, families, digital nomads and High Net Worth Individuals (HNWIs) are choosing to move away from big cities and a find a new home in quieter, safer and sun-filled destinations. Looking for serenity in their lives and in their investments. The second trend regards the purchase of real estate to obtain the Golden Visa, which suffered a change in legislation in 2022, requiring that all investments within certain cities, in Portugal, be of property in assigned ‘Touristic Property’ condominiums. This resulted in new investment opportunities, particularly for post-Brexit buyers and allowed for the local market to grow further in the low- to mid-level pricing range.
After almost 40 years in the luxury real estate business of the Algarve, the ONE Select Properties team is always happy to showcase a truly special region, that has been shared with many clients to this day, and that we hope to share with many more in the future.