Summer is over but you would not know it, judging by the weather. Endless sunny days, temperatures in the high 20s, the crowds have gone and many feel that autumn is the best time of the year in the Algarve.
At QP Savills we have specialised in the very top of the market with offices in both Quinta do Lago and Vale do Lobo covering that general area and we also have a beautiful office in the heart of the old town of Loulé and from here we are better able to cover the entire Algarve coast.
So how was the summer for the local property market?
Portugal is well and truly on the global map. Visitors are increasingly more international and while the British still make up the majority, we are seeing a good amount of other nationalities. The value of the government’s Non-Habitual Tax Regime and the Golden Visa scheme cannot be underestimated and they have not only had a very positive effect on the Portuguese property market, but importantly also on the Portuguese economy. PWC in Lisbon report that as of the end of August 2019, the Golden Visa scheme has brought in an incredible €4.8bn into the country; €4.3bn of which was invested in the property market.
In general, we can report that real estate sales continue to be excellent. Within the Quinta do Lago and Vale do Lobo areas, and contrary to the rest of the Algarve, we continue to see huge demand from the UK (80%), not only huge in terms of number of buyers, but also in the type of investments these buyers are making. We see a marked increase in the average sales value and noticeably fewer sales of smaller properties valued between €400.000 and €750.000. Property values in this area continue to rise and especially so at the very top of this market (€7m+) as demand remains steady and supply is low. Britain’s continued uncertainty to leave or not to leave the EU is possibly further encouraging many of our wealthy buyers to invest in a secure and sunny holiday home in Euroland.
Very exciting is also the news coming from our Loulé office. Over the summer, the team there have achieved excellent sales, which have included some spectacular properties achieving great six-figure prices rarely seen outside of the established resorts.
These buyers have also been from the UK but there is much greater demand from other nationalities for properties across the coast including France and Italy (eastern Algarve) for whom the Non-Habitual Tax Regime is also a great draw. Surprisingly American snowbirds who would normally fly into Florida for their winters, are now indeed also landing on our coast and investing in property here — to use in the winter months and rent over the summer.
We have been delighted with the demand for our services and as part of the global Savills Network and our 20 years of experience dealing with some of the most impressive properties in and around the Quinta do Lago area, we are well placed to attract the right calibre of buyers for our new vendors from across the coast. The Loulé team have been busy taking on some magnificent properties primarily in the areas surrounding Loulé but also across the entire coast.
We are the exclusive agents for Marriott’s new W Algarve. Sales of the 1- to 4-bedroom branded W Residences have started well and phase 1 was quickly sold out over the summer and we are now releasing the next units for sale. Located waterfront to some of the most iconic beaches on the coast (Evaristo), Marriott’s five-star W Algarve will have 134 stylish hotel guest rooms and suites, extravagant facilities and a full range of culinary experiences.
Forbes has just listed the W Algarve as one of the most anticipated hotel openings globally for 2020!
What else is happening on the property scene?
Faro and Loulé are blossoming! Real estate prices have doubled in the past five years and the towns are alive with trendy restaurants and bars and popular festivals. Old buildings are being snapped up and renovated and the avenues are being brought back to their former charming glory. Rents are increasing within these towns making investments even more attractive as yields are becoming more interesting.
Another interesting observation is that over the past 10 years or so, virtually none of our buyers have used a mortgage to purchase and all of a sudden, we can see that almost 20% of our buyers are indeed buying with borrowed funds. Money is cheap to borrow and so why not?
Surely due to demand, and the growing international Algarve residential population, a new international school called Eupheus has opened in Loulé. Eupheus is a state of the art, pre-prep, preparatory and lower secondary school founded by a small team of highly experienced educationalists. Facilities such as these are only adding to the appeal of the region and ensuring that the Algarve retains its exceptional position on the world stage.
If you would like further information on the Algarve property market, please do call us!
Text: Kerstin Buechner, Director QP Savills