By Chris Graeme [email protected]
Despite a continued bleak picture in the Portuguese second homes market because of the financial crisis, well thought-out quality properties and resorts will recoup their value.
Speaking at the second Vivain Portugal Residential Tourism Conference for 2010 in Lisbon on November 26, which discussed options for investment and property product positioning, guest speakers and delegates alike stressed the importance of Portugal being packaged at property and tourism fairs worldwide as a country rather than solely focusing on areas such as the Algarve or the Silver Coast.
Lucilia Cruz Pinto, CEO of Vivain Portugal, asked: “How do we sell the country and market it abroad as a holiday and second home destination? We can’t wait for the government to do that for us. We, as private entities, must do that ourselves and work together. It’s about networking and more networking,” she said.
Ralph P. Viereck, Managing Director of Engel & Völkers Resorts, said that the Portuguese needed to be attentive to individual cultural needs which varied in Germany from the United Kingdom market.
Both he and Sven F. Kallstrom, Founder and Chairman of Fair Media International AB, suggested that the Scandinavian, Danish and German markets could take off in coming years if quality developments were planned correctly to meet specific national requirements, while Simon G. Perks, Deputy General Manager of Santander, warned that “people who have money still have money but will be choosy when buying and selling” and would hold out for the right price.
He also said that Portugal would remain an interesting and popular quality second homes market because of the weather, relative proximity to the United Kingdom and Ireland, quality developments and the traditional affinity the British island markets had for Portugal.
Perks added that Lisbon was a good option for city breaks while, although the Algarve would continue to be the number one destination for investment, other areas such as the Silver, Blue and Alentejo coasts would also prove attractive as people looked for Portuguese cultural authenticity when searching for a location for a second home.
Despite talk of green shoots, the atmosphere in the United Kingdom in terms of investment would remain flat leading up to the General Election but the feel-good factor and confidence would return with a new government unless there was a hung parliament, he added.
Lucilia Cruz Pinto, in her opening address, said that although the tourism residential property sector was at a “critical and special moment”, new destinations spurred by the TGV and new airport could open up opportunities in sustainable development but said it was a question of “security, transparency and confidence” and the “power of opportunity”.
Carlos Moedas charted the excess of offer in the market in the 1990s and first half of the present decade and the subsequent lack of demand.
“The crisis began in the financial sector which has arrived in the property sector and debunked the myth that property always goes up,” but said that the good news for the Portuguese market was that there was a “better relationship between profitability and lower volatility” than other competing markets abroad and suggested that financiers and developers would have to run more risks, while Portugal would take longer to bounce back because it was far from the European real estate highways and suffered from a weak financial system.
The lack of liquidity in the Portuguese market and weak cooperation in the financial system meant that it could be as late as 2013 when the market would finally fully recover.
It was stressed that the difficulty in getting credit would continue to be “devastating for the property market” as banks continued to be cautious about lending money out and using cash injections from governments and central banks to shore up their balance sheets instead.
On the plus side, Portugal had “always been seen as a quality place to live and will continue to have potential at the top end of the market,” said Simon Perks.
Do you have a view on this story? Email us at [email protected]