Many people are wondering what has happened to the housing market in the Algarve during these extraordinary times effecting the whole World. Whether the property prices are dropping, or interest from buyers is decreasing and if contracts are not completing.
This World pandemic was not something the average family business like us, would imagine to include in the 2020 Business Plan. Here’s our first hand experience of working in the Real Estate industry during Covid-19 in the Algarve, Portugal.
Never before have we seen the streets, beaches as well as the skies above the Algarve so empty and homes so full. Like every household, our home became our haven with our families. Everyone is at home, even celebrities aren’t able to work and enjoy their wealth and are sharing their experience on social media, this event did not discriminate. Not everyone has had the same experience, the difference is how these events have hit the average household two-fold, with uncertainty with both our physical AND financial health.
It has made many of us realise and appreciate what is essential to our everyday lives, our family, health and home. How important it is to be able to earn an honest living in order to be able to afford to live and how everything can change in just 1 day. Many people we have spoken to have shared how this is a real goal changer and they are now pushing ahead with life changing plans they were only contemplating before and some totally changing their life plans all together. People are giving their health and happiness more priority.
Homeowners and Prospective Buyers are wondering what this means to the purchase and sale of properties in the Algarve. We'd like to share a recent experience we found with a property deal we had in place before this World health crisis, that instead of being put off, the Buyer was even more enthused to push ahead and proceed to a signed Promissory Contract and put down a deposit. The Homeowner lives abroad so we’re taking care of everything, it is our speciality and our pleasure to help the Homeowner and Buyer who can’t be in the Country in person with the current constraints on flights and border controls. The Buyer has a mortgage, so that ends the myth that Buyers can’t get mortgages during the health crisis. We have a deep sense of responsibility to help people with their property goals wherever they are, and whatever is happening, in the World.
In terms of property prices, you might have read social media opinions that prices will drop. Do you know how many Homeowners have asked us to drop their property prices, ZERO. Homeowners know they only need one Buyer for their property and sometimes they can afford to wait. For sure there will be some Homeowners whose circumstances have changed so they may review their prices. We still have demand from Buyers, we still are carrying out property viewings with safety guidelines. We still have Homeowners abroad who want to Sell, in fact even more from Homeowners who can’t travel to their empty properties, so you will see some new properties to the market. We know how this process works without Homeowners or Buyers being present, that’s a normal day for us so business continues.
As you know, when there is a greater demand from Buyers compared to the amount of properties For Sale, that is a Sellers' Market (supply is less than demand), this was the situation in the Algarve before this all happened. On the contrary, when there is a greater amount of properties For Sale with a lower demand from Buyers, this is a Buyers' Market (supply exceeds demand). Ask any Estate Agent now and they will likely tell you there is still a shortage of properties on the market to meet demand. In these situations property prices are sustained, but we can’t predict or guarantee what the future holds, we wish we could. Recent events with the rising of social tensions, have encouraged Buyers who were previously only thinking of making the move to buy property in Portugal, now making that a priority, sustaining Buyer demand. Recent events will see some Homeowners leverage their assets to look at selling their second home in Portugal, whether forced to cut costs or change their life plans to cash-in their assets sooner than planned, only time will tell what impact any of this will have on property prices in the Algarve.
We have found this uncertainty in one area, is actually making some people more decisive in others.
This new reality people are facing stuck safe at home, has made some re-think of how to better use their time, who to be with and where to be, searching for something new for the future. Some people are not going back to how they were thinking before, this has been a shock to everyone, for the first time we’ve all been through something quite drastic at the same time at home together. Only an economist might know for sure the effect on the Real Estate market and property prices in Portugal. We are sharing our experience and the activity we are seeing on the ground in the Algarve with new Listing requests and new Buyer enquiries. Perhaps we haven’t seen a bigger slowdown because many people have had more time to focus on property in the Algarve.
At Diamond Properties Algarve our biggest client and customer base is Expats. The Real Estate industry can feel tricky for Buyers and Homeowners abroad because you need someone to trust on the ground in the Algarve who knows what they’re doing and the language. Which is why we’re busy continuing to work throughout these times, doing Listings and Buyer viewings approaching them with caution, with equipment available for us and clients with some rules and restrictions in place. We have everything you need to know to Purchase and Sell a home or business premises in Portugal, having accumulated knowledge day by day, week by week setting into motion your property goal. We did not stop working and believe that our principals have helped us help our clients during these unprecedented times and we will continue to do our bit to positively contribute to the economy of Portugal, the housing market in the Algarve and your needs.
What you choose to do about your property goals in the Algarve, is up to you but we’re here to help when you decide.