Prop­erty: Due dili­gence nec­es­sary be­fore mak­ing pur­chases

China Daily (Canada) - - FRONT PAGE -

on sale on­line for less than half the price she had paid.

“I saw that houses in the same area were val­ued at 210,000 eu­ros to 250,000 eu­ros while my home was sold for more than twice that value,” saidHua. “I’mtruly up­set by all this.”

Sev­eral on­line real es­tate list­ings show prices for sim­i­lar three-bed­room prop­er­ties in the same re­sort rang­ing from 220,000 eu­ros to 515,000 eu­ros.

Pel­i­cano-In­ves­ti­mento Imo­bil­iario SA, the com­pany that owned the house Hua agreed to buy, de­nies that it sold the prop­erty at above mar­ket prices.

Some prop­er­ties are be­ing sold at lower prices be­cause they have been re­pos­sessed by banks or be­long to in­di­vid­u­als look­ing to re­pay debts, Pel­i­cano said on Feb 10.

“The Arra­bida Re­sort and Golf Academy has more than 1,000 res­i­den­tial units, most of which have been bought by for­eign clients with dif­fer­ent na­tion­al­i­tieswhoare to­tally sat­is­fied with the ac­qui­si­tion,” the Lis­bon-based com­pany said. Pel­i­canohas “to­tal le­git­i­ma­cyan­dlib­erty to de­fine its price pol­icy and the po­ten­tial buy­ers are free to de­cide whether or not to buy these prop­er­ties”.

Ser­gio Martins, di­rec­tor-gen­eral of the Por­tuguese-Chi­nese Busi­ness Cham­ber of Com­merce, is aware of com­plaints bysomeChi­nese of over­pay­ing for prop­er­ties in Por­tu­gal.

“This hap­pens be­cause some un­usual me­di­a­tors tend to be in­volved in these trans­ac­tions, em­i­gra­tion agen­cies and more than one real es­tate agency in­Por­tu­gal andChina, plus lawyers and other con­sul­tancy ser­vices,” Martins said on Feb 10. “Com­mis­sions can some­times rise to as much as 25 per­cent of the real es­tate trans­ac­tion.”

Un­like Hua, Rex Shen spent months re­search­ing home prices in Por­tu­gal be­fore us­ing up most of the money he saved work­ing as a casino man­ager in­Ma­cao to buy two apart­ments in the cen­ter of Lis­bon. He cut out mid­dle­men and paid al­most no com­mis­sions.

Shen now works as a real es­tate agentinthePor­tuguese­cap­i­tal sell­ing prop­er­ties to his fel­low coun­try­men.

“A smart Chi­nese in­vestor should do the nec­es­sary re­search be­fore com­ing to Por­tu­gal,” Shen said on Feb 25. “It is a free mar­ket and some real es­tate agents in Por­tu­gal are in­deed sell­ing prop­er­ties at very high prices.”

De­mand from Chi­nese prop­erty buy­ers re­mains strong asChina con­tin­ues to al­low a freer move­ment of funds in and out of the coun­try. About 90 per­cent of bid­ders at a real es­tate auc­tion of gov­ern­men­towned apart­ments in Lis­bon last year were Chi­nese.

The Chi­nese came “at a dif­fi­cult time for Por­tu­gal, when many didn’t be­lieve that the coun­try could face and over­come the cri­sis”, An­to­nio Costa, the mayor of Lis­bon and leader ofPor­tu­gal’s So­cial­istParty, saidon Feb 19. They made a “big con­tri­bu­tion to Por­tu­gal’s abil­ity to be in the sit­u­a­tion it’s in to­day, very dif­fer­ent from where we were four years ago”.

For­eign­ers ac­counted for 90 per­cent of the 730 mil­lion eu­ros in­vested in Por­tuguese real es­tate last year, al­most three times more than in 2013, ac­cord­ing to data com­piled by Aguir­reNew­manSA, a real es­tate con­sult­ing com­pany in Lis­bon. The Por­tuguese gov­ern­ment ex­pects eco­nomic growth to ac­cel­er­ate to 1.5 per­cent this year from an es­ti­mated 1 per­cent last year, bol­stered by ex­ports and in­vest­ment.

That is why Por­tu­gal should treat for­eign in­vestors well, saidPaulo Silva, head of Aguirre New­man in Por­tu­gal. Some Chi­nese in­vestors have trou­ble de­ter­min­ing if they are over­pay­ing, he said.

“It’s hard to know if a house that costs 500,000 eu­ros in Por­tu­gal is ex­pen­sive when two park­ing spots in Hong Kong can eas­ily fetch more than that,” said Silva. “That makes it im­por­tant for Por­tu­gal to treat all for­eign in­vestors fairly or they will just move some­where else.”

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