By Stephen Anderson [email protected]
Stephen Anderson is the Managing Director of Infinito Real Lda and has a broad knowledge of the real estate industry in Portugal. Having held senior positions in a number of companies around the world, he now lives in Portugal with his family.
Well, the New Year is well underway and with it there is the normal surge of enquiries of people fed up with the winter weather and looking to move abroad for some sunshine and a more relaxing way of life.
With the worst weather in the UK during December for over 100 years, this may well have been the catalyst that prompted all these early visits, effectively being the stone that broke the camel’s back when it comes to making that move overseas.
There has been a noticeable increase in the number of people enquiring this year, and it isn’t just those looking to move abroad.
There has been a lot of interest from clients looking to invest, something which we generally don’t see at this time of the year in such a large volume.
To guess at the reasons behind this; well there is more than a glimmer of hope that the global economic crisis is at last starting to subside.
The Portuguese have managed to successfully negotiate the sale of €750 million worth of bonds, which in turn caused a knock on effect with both the European and American money markets, and investors have taken notice.
For anyone looking to invest in a property, the threat of a mass change in banking rates and countrywide taxes, not to mention public sector salary alignments, is more than enough to cause plans to be put on hold for a while.
Now with this relatively stable, people have stepped up their interest and are now looking to take advantage of the great deals still available in the Algarve while the going is good.
As far as trends go, well, there is never really much of a change in this respect. There is no sudden demand for ultra modern high tech villas or old rustic wind wills.
This is something that at least for the last decade has remained exactly the same. The split is always more towards a holiday home with some rental income rather than 100% investment.
In fact, our investor clients are attracted to the Algarve because it means they can actually get some personal use from their investment! A few weeks in the sun coupled with a safe investment is something that has not always been the case when talking about property purchases.
What has been changing quite extensively from last year is the willingness of banks to lend. Towards the end of the year, many banks just stopped processing applications completely until the New Year. This is something that is by and large unavoidable and can cause problems with completions and fulfilling the clients’ obligations with their promissory contracts. Not to mention the possibility of the interest rates increasing during this time.
It is crucially important when applying for a mortgage that all the paperwork is sent as early as possible – any delays can be very costly in the long term.
We’ve been experiencing delays of anywhere from four weeks to four months for approval to be sent. This can make a difference of anywhere up to 1% higher interest rates than when the acquisition process began.
While the start of the year can be quite busy with enquiries, it’s quite rare that so many people have decided to visit during the months of January and February, where as traditionally a lot of prospective buyers have tentatively started looking around this time with the idea of coming over to look around Easter time.
Perhaps these are the signs of a market starting to enter a time of recovery; a little too early to say with certainty but the next month or so will give a better indication.
Stephen Anderson can be contacted on telephone/fax + 351 289 313 325. For more information about Infinito Real, please visit www.infinitoreal.com