Georgina Richards, an associate for Knight Frank, independent global property consultancy, comments on the Algarve’s property market:
The market in the western Algarve was one of the first areas to react to the global economic crisis with prices falling on average by 25-30 per cent.
On the whole, vendors, particularly the British, have been quick to grasp the need to reduce prices in order to sell, whereas Portuguese vendors remain robust with regard to pricing and often sell privately.
Although we have seen increased interest in this area from other nationalities, the majority of buyers remain British, with the bulk of sales beneath one million euros and subdued activity over 1.5 million euros.
Stock levels remain good with a varied range of properties, however, it is the older residences occupying primary locations that are selling regardless of condition, while secondary and tertiary locations are disregarded out of hand.
Elsewhere in the Algarve, the story could not be more different. Prices in the Golden Triangle, which encompasses Quinta do Lago and Vale do Lobo, have not experienced any visible price movement. Indeed, prices have remained static as interest along the Algarve has reverted back to core markets, which have experienced previous economic crises but weathered the storm, and vendors do not feel under pressure to sell.
As a result, sales have been sluggish and protracted and the deals that have been achieved have been negotiated hard and at length. Of note, there was a significant increase in buyers over the summer months, specifically Portuguese, who are buying plots of land rather than built properties in either resort.
For 2010, I expect prices to remain relatively stable in the Western Algarve, with some softening in the central Algarve.
My top recommendations for 2010:
Western Algarve – price reductions of up to 30 per cent make this area a very attractive prospect, especially for those who want to make their money stretch as far as possible.
Development remains controlled allowing the Western Algarve to retain its Portuguese charm while under an hour’s drive from Faro International Airport.
Quinta do Lago/Vale do Lobo – Despite the lack of price movement, it is hard to beat these two mature resorts as they offer the epitome of the perfect holiday home. 2010 will be the time to keep a close eye on this market.
Georgina Richards can be contacted on telephone 00 44 (0)20 7861 1060 or by email at [email protected]
