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Algarve Property: The Foreigners Are Back, Phew!
September 30, 2009Article by Ray Withers
There is no doubt about it; the worst of the downturn is over. Around the world economies are starting to show signs of recovery, and the signs that people are back into overseas property simply cannot be missed. For a start, the national press coverage of overseas property is growing rapidly, a clear sign that the public sentiment towards overseas property has turned positive again. And the Algarve is set to be one of the biggest benefactors of this.
At the height of the boom in 2007, every day the national press would contain dozens of stories on overseas property investment, emerging markets, off plan, from high-yielding Asian investment properties to pure holiday homes in the Spanish sun. People were lapping it up — we all had the overseas property bug.
Yet, if you looked at the papers in the last year or so, you could barely find a story on overseas property, let alone anything positive. This is obviously because the UK public was more concerned about affairs at home, namely the recession than overseas property markets.
Now overseas property is growing in popularity, but at the moment people’s risk aversion is still high. They are buying property in established markets only. With that in mind the favourites are obvious; France, Spain, Italy and Portugal. The popularity of established markets can also be explained by the current prevalence of lifestyle buyers in the market.
None the less: the negative press Spain has received because of its over-supply problems, and the fact that analysts think prices will continue falling for some time yet, have led to Portugal receiving a much larger market share. Of course, the fact that prices in Portugal are currently stable and looking like some growth in the near future (Source: Knight Frank Q2 Global house price index) has helped immensely in this.
The Algarve is Portugal’s most established property market, and as such it is proving to be the biggest benefactor of the new wave of interest from foreign buyers.”Foreign buyers are back and people know it. The sense of relief among local Algarve property owners and agents is almost tangible,” said Ben Jeffries a sourcing manager for property investment consultancy Property Frontiers.
“In a market like the Algarve, that has always been heavily built around foreign buyers, as soon as there is a decent level of activity from foreigners prices stop falling and start growing almost instantaneously. Algarve property owners and vendors are once again pricing based on what property is worth, and selling based on the offers they receive,” he explained.
“With that in mind, I’m sure I don’t need to say it but I will. To anyone out there who has been holding off buying a property on the Algarve to get in when the market bottoms, you have already waited too long, get in now and you’ll still get a bargain,” Jeffries concluded.