Properties definitely appear to be selling at the faster rate we have seen since before the crash in 2008, so does that mean the price of real estate in the Algarve will start to go up as well?
I'm afraid that I don’t think so, but what we have seen over the last few years is two things; firstly we saw prices drop from unrealistic levels to levels that are more achievable and sustainable.
The second thing was a market that was littered with property owners feeling increasing pressure from banks and general running costs leading to them letting their properties go for below market value prices.
This has resulted in some great deals being had by many new buyers, but it has also left a scar on the market, where new buyers are still looking for these “wounded lambs” to take advantage of. I’m afraid that whilst there are a few of these deals still coming to market, in the main they have dried up. Property prices are at a more realistic and sensible level, I believe there will always be room for negotiation but the days of offering 30-40% below asking prices has thankfully gone and prices are now firming up.
Buyers constantly ask me whether the market prices will start to rise and I answer the same thing every time, I don’t believe we will see significant movement in prices for the next 3-5 years. The good news is that prices are stabilising with both buyers and sellers appearing to be happy with what they are getting. Even the banks are starting to lend, BES is offering 70% LTV at around 4% over Eurobor. Exchange Rates are also in our favour with the £ to € rate exceeding 1.22€ for much of the last few weeks. So the wind has definitely changed and property is once again selling. Be it the French & Scandinavians buying for tax reasons or the Brits trying to avoid the terrible weather, the market is starting to move again.
I was once told that if you look back over the last 100 years, property has increased on average 10% per year. Let’s hope the last few years were just another seasonal blip in the life of Real estate!
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