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.
In general, the property market has remained much the same at the start of 2012.
We have, however, seen a number of developers trying to shift their remaining stock by offering further incentives and financing options.
Throughout the last few years the onus has always been on the ‘unknown’, surrounding not just Portugal, but the whole of the EU. This appears to be ongoing with those clients that remain undecided not willing to take any action in the Algarve property market, or any other market for that matter!
However, this has certainly not deterred the Algarve faithful, who are avidly looking for a bargain. That does not look set to change during the first half of 2012.
We’ve seen a few more bank repossessions coming onto the market, and they have been selling very quickly. The added bonus with these sales is that the prices are fixed so there are no prolonged negotiations and the banks are slightly less restrictive when it comes to financing.
In fact, most of these properties have the option of 100% financing should the buyers be residents in Portugal.
As one would expect, the banking side of the property market is certainly not helping the sale of property. Never more so has it been crucial for buyers to be aware of what is necessary to obtain a mortgage in Portugal, along with the amounts on offer.
At this time, most of the Portuguese banks fall way behind the rest of the market. Indeed a lot of clients are looking at financing in the UK or Ireland using their other properties as collateral for the purchase.
There remains, however, the possibility of raising finance in Portugal once the market stabilises once more.
A lot of interest has been generated recently around the Vilamoura area, which is, of course, traditionally one of the more expensive areas of the Algarve.
Recent events have seen a lot of the once hugely inflated prices drop in line with the rest of the major tourist areas here. This has proven a great success with buyers who are out to get the most for their money.
For sellers, there is not a great deal of good news. As the developers cut their prices, the knock on is that sellers of private property have no choice but to follow suit to remain competitive.
For many, this will mean taking a meagre profit or indeed a small loss. We have been recommending clients who have property in strong rental areas to try and hold on to the property whilst pushing for more weeks of rental.
As the last year has proven, rentals have been at least as good as ‘pre-crisis’ and look set to remain so for this year. It is proving that a small investment in marketing can be an alternative to selling at a loss.
We would hope that by mid-2012 there would be some closure on the Euro debate and finally see some solution, however long that may take.
We WILL, for sure, see resurgence in property buyers here and it would be no surprise if this coincides with the loosening of banking restrictions and mortgage possibilities.
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