Well the bailout situation is well under way at this point, and so far there haven’t been any sweeping changes to the Algarve property market!
The biggest change that we’ve noticed over the last month or so has been a switch up in the number of cash buyers compared to those looking for finance. This is good news all round really. For buyers they have an incredibly strong bargaining position, in fact the only real bargaining tool at this present time. Sellers, should they accept an offer from a cash buyer, they would expect to complete the transaction within 4 weeks if not sooner, which is an attractive proposition for those in dire need to sell, or indeed those that want to sell up and take advantage of the market to upgrade to a larger, or more luxurious property at a reduced price.
With the summer now upon us, and with reports that, despite the impending end of the world as we know it, tourism is set for a record year. Comparisons have been made with the pre crisis year of 2007. This is fantastic news for everyone in the Algarve, which as we know is widely sustained by the tourism industry with the summer being the most important time of the year to help during the quieter months over winter.
Property buyers are also here in abundance during the summer, and whether they are actively looking before getting here, there is no denying that once here, in the sun with the beautiful surroundings it is difficult to not at least ponder the thought for a moment.
The real estate market is unquestionably slow at the moment, but that does not mean we are without buyers, far from it. The biggest group of buyers by far, are those looking for “something for nothing”, and generally leave disappointed and empty handed. The reason for this is simple, prices are not as low as people in the UK, or in Portugal for that matter, make them out to be. Are there discounts, yes there are of course, but certainly not 50% discounts, which are what some people believe there are due to their local papers telling them so. Whilst it may be possible to get such a large discount, it is unlikely to be someone’s dream property, as after all if it was then it wouldn’t have a 50% discount on it, it’s simple logic.
The Algarve doesn’t have an oversupply of top quality properties, so anything of true value and quality in a good location will still carry a price tag that reflects this, and although some buyers may not agree with this, and think that they should be entitled to a discount, are more often than not disappointed. But this is no bad thing. Many people forget that the price they are being given, is already discounted. Asking for more is of course something to be done, as after all “if you don’t ask you don’t get”, but it is certainly not a given right, and if there needs to be a massive discount to sell it now, then it’s highly probably that come the time the buyer becomes the seller, they too will be faced with the same proposition. Just because it’s cheap doesn’t make it a good investment, ask anyone who’s bought in any “up and coming area” in Eastern Europe and you will find a lot more people have lost money, than the lucky few who made a profit.
The latest government are due to take control of the country on the 25th of June, and with the latest austerity measures being introduced, and the hope that banking funds will be make available once more, we must wait and see what the next few months brings.
The great thing about being in the Algarve is there’s not many better places to be during the summer time.
