By CHRIS GRAEME
IN THE Chinese language, the word ‘crisis’ has a double meaning – on the one hand it means difficulty and suffering and, on the other hand, it means challenge and opportunity.
At a day-long seminar on Friday into the Challenges of the New Paradigm in the Residential Tourism Market at the Marriot Praia D’EL Rey Hotel, Óbidos, real estate experts gave an honest appraisal of a difficult situation but one with light at the end of the proverbial tunnel.
While all of the renowned international and national speakers painted a canvas in sombre brushstrokes and agreed that nothing would quite ever be the same again, there was consensus that out of the ashes opportunity would come knocking and the good times would eventually return.
Portugal is geared up to tourism, the second homes, time share and fractional markets, not to mention the half a million foreign residents from the UK, Ireland, Germany, Holland, Belgium, Spain and other countries who have made the Algarve and up-and-coming new resorts on the West’s Silver Coast their holiday home destination of choice.
If banks stop lending money, if people adopt a ‘wait and see’ attitude to buying that second dream home in the sun, then that spells bad news not only for the Portuguese government and construction and tourism resort developers but also the mass of local businesses in the Algarve servicing these part-time foreign visitors and, in some cases, full time residents.
A few key ideas came out of the Viva in Portugal organised event: that people will make cuts in their lifestyle at home but will always find money for holidays and travelling, that well-thought out, sensibly priced products will always remain attractive and that there are enough branded products in residential tourism to suit all pockets and interests.
There are so many product variables out there that the discerning second home leisure seeker doesn’t even have to buy or build a property out right any more.
One future boom area with potential and possibility is the fractional market which, unlike timeshare, represents a real estate purchase where you can spend up to six weeks a year in your apartment or villa while the rest of the year it is rented out to others with a share of proceeds working to your interest.
Then there is the condo hotel where you purchase a room in a high quality hotel and stay in it for a certain amount of time each year while the rest of the time it is rented out.
Popular with the British holidaymakers is the Buy-To-Let model which gives you a rental income and outright ownership rights as an additional nest egg investment.
Residential tourism would suffer from a lack of liquidity and lending from banks, shrinking demand, lack of confidence and credit, but experts argued a “back to basics” approach would make a trimmer and more dynamic residential sector.
One thing was for sure, Portugal had many qualities that would help it resist and recover from the crisis relatively quickly: a good climate, excellent security and safety record, favourable socio-economic environment, a wide range of new generation resorts with good quality products at accessible and competitive prices.
Please read story on page 3 entitled Luxury developments bring major investment to Algarve.