Date of Issue: March 2010
Infinito Real, a Portugal based company, believe the recession has brought about a market where the “rich get richer”
Infinito Real, a Portugal based company started and run by property investors, have seen a vast change in the type of client they are getting in comparison to last year and believe this “high earning, big investment” trend will continue to grow up to the end of the year. So have continuing low interest rates and reduced property prices only benefited a certain clientele?
Last year, the majority of customers for Infinito Real were what one would deem as “lifestyle” clients – someone who has saved to purchase a property for themselves to use for a prolonged period of time, or for a permanent move. However, the demographic has changed rapidly over the last year and 2010 has brought about a high influx of new clients who are in a much higher income bracket. With more disposable funds, these clients are looking for investment properties that can double as holiday homes.
As the climate continues to stabilise those who had not been looking into property investment before realise the time to capitalise is now. With mortgage rates particularly favourable for those clients with wealth, and therefore low risk, and the prestige of owning a property in a luxury area such as the Algarve, the appeal is much higher than leaving it in the bank and perhaps making a 3% return.
Stephen Anderson, Managing Director of Infinito Real comments, “The ‘boom’ of 2007 was a time of property madness, where there was a frenzy to buy as much as possible which ultimately left many in a financial nightmare. In those days the idea of buying abroad was still relatively new and the implications not always fully understood. Nowadays buyers are much more savvy, taking elements such as location and type of property into consideration. Generally speaking the two bedroom, two bathroom apartment is the bench mark for the majority of buyers, with at least a swimming pool on site and only a short drive to the beach. These types of properties in high yield rental areas are extremely popular, which when coupled with a large discount can bring in rental returns in excess of 10% per annum.”
The key for those “lifestyle” buyers who are still looking to fulfil a lifetime ambition of owning a property in Portugal is to remember the benefits of a Portuguese mortgage are still very appealing. Stephen continues “Generally my advice is, if you are interested in a property discuss the types of loans available and the associated repayments with a mortgage brokerage. Set yourself a monthly budget that you are comfortable with and see how much you can borrow without over stretching. Certain areas will yield a better return if you “need” to make an income from the property so look for a bargain that will put you in a strong position to sell at a good price in the future, lowering the risk of becoming stuck with a property you can’t sell on.”
On the recent Forbes rich list, the average increase across the top earners in the world has gone up by $500 million, the time to invest is when the market hits the bottom, and right now is that time!