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.
This time of the year has always been incredibly popular for purchasers and this year has been no different – in fact compared to the previous couple of years this one has been even busier.
Most people realise that prices are at an all time low and although there are a few potential buyers out there who are sure that prices will decrease even more, the majority are quite comfortable that they aren’t going to see the prices plummet drastically anymore and, other than the odd private sale dropping a few thousand Euros, I would tend to agree with the masses on this one.
There has already been a small turn around in the prices of property in the Algarve, according to the latest RCIS report. A lot of people look at the whole of Portugal when basing their opinions on price rise or fall, however this is silly.
The Algarve is a micro climate of drastically different client’s appeal than the rest of Portugal. You wouldn’t compare Central London with the Outer Hebrides when looking for a property in the UK – the same rule applies here.
This year has shown a distinct change in the typical client trends. A lot of people still believe they can buy a property without using any of their own capital with the so-called “no money down deals” which don’t really exist.
However, now we see a much more intelligent client, who has done their homework before coming over and looking for a property. This way of thinking saves so much time in the long run and allows buyers to set their expectations before they get here.
After all, if you are looking for a private detached villa with a pool without the financial ability in the UK and Portugal to buy one, then you must either reset your goal or wait until more funds are available.
As the last few months have shown a less-than-willing lending criteria from the Portuguese banks, a lot of our recommendations have been to use UK banks for your overseas property.
Many of the big name banks are willing to lend to buy a property here, and as they are in the UK, the mortgage payments can be in Pounds or in Euros, whichever the client prefers. They also have a much better outlook on the more complicated applications that the Portuguese struggle with, namely self employed company owners. This has proven a welcome bonus in the financial battle to help clients finance their new property here.
Prices seem to be remaining steady with no signs of any further drops imminent. With the lack of any new build properties being constructed at this time, there is only a limited amount of “quality” stock available.
Of course as these properties are sold off, which they are being, then the strength of being in a buyer’s market diminishes, and the tables will switch. This is, of course, not a scenario I’d expect for the next few years, but it is without question starting to form and has been something clients are expecting when they buy now, as the opportunity to make profit is paramount.
Anyone looking at buying a property in the Algarve would certainly be advised to take some financial advice prior to seriously looking and viewing property as it will give a clear indication of what your price range will be.
Stephen Anderson is the Managing Director of Infinito Real Lda and has a broad knowledge of the real estate industry in Portugal. He can be contacted on telephone/fax + 351 289 313 325.
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