The property industry in the Algarve in Portugal is hopeful that new low cost air flights to the region will help revive the real estate market that has seen prices plummet.
The low fare airline, Jet2, has announced it will be adding two new UK routes to and from the Algarve’s Faro Airport starting in April 2011, increasing its total capacity to more than 300,000 seats.
Property professionals believe it will encourage more investors who want to buy second homes and rent them out to visitors and tourists.
Stephen Anderson of Infinito Real believes this is a positive step that demonstrates growing confidence in the area and will present greater opportunities for those who already own, or are considering purchasing property in this region.
‘Budget airlines have been the making of many resort areas throughout Europe over recent years. The fact that Ryan Air opened a base in Faro airport only last year, and now news that Jet2 are offering a greater number of cheap flights across a total of seven routes to and from the UK, is fantastic news,’ he said.
‘As well as increasing accessibility, this is a positive step for tourism and investors, as more competition will drive prices down and ultimately more people to the area. It also demonstrates greater confidence in the Algarve as a growing tourism destination,’ he added.
Those looking to buy second homes could find some bargain prices, especially in the Algarve as the latest Royal Institute of Chartered Surveyors and Confidencial Imobiliário Portuguese Housing Market survey shows demand is weak and prices falling. It says that the Algarve stands out as the region experiencing the worst market conditions in Portugal.
In the Algarve a combination of sharply rising new vendor instructions and falling new buyer enquiries is weighing down more heavily on prices and price sentiment.
Anderson pointed out though that since the start of the year he has seen signs that people are gaining more and more trust in the Algarve as a strong area to invest in property with an increasing number of clients looking to buy off plan property again in the region.
‘This is something which in the past has remained quite rare with many people being put off of this way of buying through disaster stories from other countries,’ he added.
Amid the economic crisis, the Algarve has continued to be a popular destination for holidaymakers and with the tourism industry in Portugal reporting 2010 as the best year on record, as well the country now investing in itself with a new €12 billion infrastructure overhaul, this looks set to continue throughout 2011, according to Anderson.
‘The greatest gift the economic crisis has given the Algarve is a more stabilized pricing structure. There has been much publicity lately promoting the region as a luxury and high end area to invest in, and this is certainly true when compared with the average size and price per square metre of properties in its neighbouring countries,’ he explained.
‘With tourism on the rise, investors should have renewed confidence on the rent-ability of their properties even during tough economic times, and this coupled with lower prices and lower mortgage rates equal a fantastic basis for great future returns,’ he added.