Brexit will soon be here. We don’t know yet in which terms, but we know tourism will drop a lot in the Algarve, at least for some time. Our exports to the UK will fall. The UK will have to change its global trade and in the short run it will affect all of us.
The EU has many challenges to face. Brexit will affect exports from both France and Germany, who already face stagnation. The upset among French professionals will continue and Macron may face problems to keep its right-wing policy.
The EU will have internal problems, as less export from small countries such as Hungary, may let their governments press for structural changes in Brussels. It will have to cut down its huge bureaucracy, number of bosses, and former politicians in their countries. Tourism from some countries to the Algarve, such as Germany, France and Nederlands will drop.
One of the investing groups in the Algarve, purchasing homes for a golden visa, has been Brazilians. Their new government is making efforts to retain capital from SMEs and let them expand. The very rich and foreign corporations have already disinvested there. No continued flow to Portugal/Algarve is expected.
Another investing group for golden visa and real estate has been Angolans. The recent decision from a court there arresting some USD 1,3 billion from Isabel Santos and her enterprises, will affect the flow of foreign capital to the Algarve.
Non-resident tax-exception for Europeans brought many retired couples from both Nordic countries and France. They purchased thousands of homes, not only in the Algarve. But current negotiations indicate this exception will soon end.
Stability in Morocco has again gained investors from both the Netherlands and France. Morocco is one of our key competitors for both tourists and hotel investors. Also Turkey has been doing key niche-marketing to attract German, Polish and Russian tourists who had been flowing to the Algarve. Many figures for hotel-contracts 2020 indicate a drop in the tourist-flow to the Algarve.
In Portugal some 410,000 homes are for sale or rent for more than nine months. Prices started to drop, except in Porto, Coimbra and Lisboa and close to the coast in the Algarve. This indicates again a new real estate bubble. The European Central Bank will drop its purchase of public debt and interest rates will rise. It will start pressing banks in Portugal to collect due loans to construction and real estate ventures, which will lead to a new wave of bankruptcy.
This analysis is based in data from real world. I hope politicians will act firmly and very soon to avoid a new Troika in May/June.