Are property prices negotiable in the Algarve? And how does it work.
This is a hugely debatable topic, and one that has no set answer at the present time. The answer is Yes and No! Portugal property price’s have dropped, however they have not dropped to the same extent as say Spain’s Costa’s. Why you may ask, well it’s simple supply and demand. There are zero new developments in planning/construction in keys areas in the Algarve right now, very few prime plots available for villa’s and no new, undiscovered area’s to develop. What this means is once the properties are sold they are sold, done. Price is then determined by seller’s, and the Algarve market is not, primarily made up of buyers looking to “flip” properties. It also have very few desperate sellers any more, most can hold on to the property until the price’s realign.
Algarve Property Prices
What is difficult for buyers these days to understand is they can’t simply expect seller’s to lower the price by 40% because “the market’s bad”, it doesn’t work, and anyone saying this is the case is simply not telling the truth. It’s correct there has been large drops in price from builders original sales price as they were over priced to begin with that’s why they didn’t sell in the peak of the market. But now they are more or less good value for money, and asking for further reductions is not possible (of course a small reduction is always possible).
Algarve property price’s are at a great level just now, and although some properties will always come up for sale cheaper than the rest, the price point is relatively stable at this point and it would be pessimistic to say the least that price’s have further to fall.
A prime example of pricing to sell are Lusort in Vilamoura, they own substanital developments (Victoria Gardens, Sunset Villas & Monte Laguna) and were considered expensive even at the peak times. They have reduced their prices during the summer as a promotion and sold considerable amounts of property. This is a developer that would not even lower the price by €5,000 before 2010, now they have lowered all the developments by approx. €100,000 on average and they sold. BUT they didn’t budge on these new prices, so the price you saw was the price you paid.
Portugal Property Bargains?
The idea of this is to get buyers used to accepting the price they see as the discounted price, there is no need to negotiate further, and in most cases this wont make a huge difference anyway, as it has already been stripped to the minimum. What tends to cause a bit of confusion is agents suggesting buyers can get huge discounts off everything in the hope of getting a buyer interested in the property, without knowing what the seller will take. This is, in my opinion, a waste of everyone’s time and is what causes part of the problem for buyers, as they want to believe the person telling them they can get discounts of 30% or more, and when they are rejected they loose interest.
Ultimately if your a buyer, by all means put in an offer, but a sensible offer speak with your agent and ask them how much they think is reasonable. If you offer substantially less, most buyers will reject it and not even counter offer, so if you do really want that house you’ll now be in a much weaker position as the seller is already offended.
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