by Mary Mangan [email protected]
Mary Mangan is the Managing Director of Winkworth Real Estate Portugal. The company has properties for sale on the Algarve and on the Silver Coast.
Whilst there has been much negativity expressed about the state of the Portuguese economy and the resulting bailout to the tune of 78 billion, Reuters has recently reported (July 18, 2012) that the country is slowly winning back some investor confidence, slashing its budget and privatising state companies under close monitoring by the troika of the European Central Bank, the European Commission and the International Monetary Fund.
Prime Minister Passos Coelho in particular has won a reputation for strict obedience to painful cuts in social spending. He and top officials have met individually with large investors in Germany, China and the United States to promote the country and to encourage inward investment.
This positive sentiment combined with the shift in the GBP/EURO exchange rate to 1.27 (August 13, 2012), currently contributes to a more positive environment for the property market in Portugal.
Certainly deals agreed in the months of July and August would support this trend and although volumes remain low compared to the peak years, early signs are more positive than in recent quarters.
At the same time buyers are much more cautious and are looking for that ‘bargain’. They are also well informed and know exactly what is happening in the market and where the best value is likely to be secured.
Overpriced properties are just not generating the interest and buyers are also staying well away from inflated condominium charges and unexplained ‘extras’.
Most prospective buyers are now not just looking at the up front cost of acquiring the property but are looking at the cost of ownership over a 10 year period.
Owners of properties on condominiums should pay close attention to the annual budget and schedule of costs for their condominium.
Real estate agents throughout the Algarve are seeing more and more buyers looking into condominium charges in some detail to assess whether they offer value for money or whether they are partially covering some of the costs of the developer or resort operator.
As a property owner it’s important to distinguish between the costs associated with the condominium and any resort operation on the site.
A condominium is a collection of individual residential units and common areas along with the land upon which they sit.
Owners are liable for the costs associated with the upkeep of the condominium and the common areas and should pay an administration fee to the administrating company.
However, an examination of condominium fees in a number of developments can expose costs which may not in fact be necessary in terms of the maintenance and upkeep of the condominium.
For example, costs associated with the operation of a resort facility may not necessarily be included in the condominium to be covered by all of the owners. If you purchase a property on a condominium and never intend to rent, you may have no interest in a reception service. You might not want maid service or membership of an owners’ club. But you will want the common areas maintained and serviced and security services.
The one size fits all type of condominium charge generally does not work for all of the owners on a development. This is why buyers are concerned and during the past year in particular they have shied away from purchasing in condominiums which do not offer a level of flexibility and clarity to owners.
That’s why most of the long established resort operators offer a menu of services depending on your requirement. Leading resort operators like Vale do Lobo, The Residences at Victoria Vilamoura, Pestana Group and Jones Homes have led the way in the development of a service offering which allows the owner to choose exactly which level of service is appropriate for their particular circumstances.