Algarve Market Assessment

[Lysos]

Just back from the Algarve. The market is totally flat & static. In the area I am familiar with (Tavira/Villa Real) there are new build villas that have been on sale for over 3 years without a sniff, & the asking prices gradually falling. On the resale side I have seen asking prices drop up to 50% over the same period.

If you are a cash buyer looking for a retirement/holiday home now is a good time to look around, but there is no rush; there are some very desperate sellers. Don't even think of buying as BTL investment; if you are very lucky, with good marketing, you might get up to @ 15 weeks rental, if you have a unique property; on an estate complex/ apartment block, less. Take out your total running costs & you will do well to break even; if you have a substantial mortgage you won't even do that.

Capital growth ?. Over a very, very long time possibly, but given the state of the Portuguese economy I suspect that we are looking at a generation or two at least.

 

[myalgarve]

Hi Lysos,

Sorry but here did you see prices 50 % down ?

I agree that now is the time to buy a property for a realistic price, but for sure not 50% down

Algarve is safe, the people are nice and the burgains at 50% do not exist, sorry, i live were all yar round and i know this area for more than 20 years.

My advise is , if you want to buy, this is the time, but do not expect to find big sales ... take your time and go to diferent estate agents and you will get a good view of market.

 

[Lysos]

When someone has had a new build property on sale with no lettings, i.e. no returns for more than 3 years, and is now looking at a building needing maintenance repairs (nil occupancy, and the weather takes it's toll) they will consider ANY offer, especially if it was built on borrowed money, i.e. a speculative build.

Just back, no change in the market. Loads for sale at unrealistic prices and the golf courses are empty. Portugal will soon have to wake up.

 

[Albufeira_Paul]

As an agent, I will give some input as to what I have seen thus far in 2011. Firstly the assessment above is correct about many properties being priced unrealistically. There are far too many sellers who believe that their property is worth more than it actually is. I always try to bring home the point that a property is only worth what someone is willing to pay for it. As for 50% discounts, I haven't seen any that steep here in the Albufeira area, however I have seen some in the 30-35% range, though these were new developments that were unrealistically priced.

That being said, I do notice the luxury market does tend to be holding up well and even selling better than last year. I was very surprised how many larger homes we have been able to sell this year. That is not to say that the low end of the market does not sell. Quite the contrary, homes at the right price have been moving fast.

If you do have a home to sell I advise going with an agent who understands the market place. Go with agent that will market your home well. One who takes good photographs (I constantly see crooked photographs of cluttered rooms with poor lighting). A good agent in a down market will put your home on the internet, make flyers, and invite the other agents from the office to come see your property.