Property: Due diligence necessary before making purchases
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.”