THE PROPERTY MARKET REPORT
As property agents, we are particularly lucky as we are part of Savills. Savills is the largest global property player in terms of residential property and we benefit greatly from being part of this network of over 600 offices. This affords us an invaluable global perspective on our industry, which is so important as our property market heavily relies on foreign investment — especially so at the top of the market on which we have focused our efforts for over 20 years.
There have been a couple of glitches in our market over the past 20+ years. 9/11 and the financial crisis of 2008 were both significant and made many of us sit up and hold our breath. However, business never came to a standstill for us at QP. Prices may have dropped slightly and recovered slowly, but as usual in the property market, it’s not for those who are in it for the short term and all that is now long forgotten.
This pandemic has been entirely different. On Friday, 13 March, business came to a halt. 50% of our agreed sales were cancelled or put on hold and no new sales were agreed for over 2.5 months. A trying time for all of us on so many levels. Personal, professional and for many of us, for the first time we were actually afraid for our lives and for that of our families and friends.
A testament to our species and our ability to adapt, come 1 June and the end of lockdown, life desperately wanted to return to normal. And so it did. With one unexpected difference. People did not just come out of lockdown, they stormed out and, to us, it seemed like people had been given a new lease of life and were anxious to make the most of it.
Over the past 3 months, our 4 offices have sold over €100 million worth of properties in the central Algarve. Never have sales been so good. Not only is the volume up, but prices are on the rise too. Our average sale price over the past 3 years has hovered between €1.6 and 1.8 million. Currently, it is up at just over €2.1 million. Speaking with colleagues, many agree, the market is buoyant and the amount of property for sale is dwindling.
The property market in the Algarve has gone from strength to strength. Over the past three years, we have sold a number of large properties in the Quinta do Lago and Vale do Lobo area for over €180,000 per square metre. This is an important milestone for the country’s property market and represents values not seen before nationally.
Price tags of over €10 million are now more and more common, with standards of construction and design able to compete with the best in the world.
We were keen to try and discover why our property market is currently outperforming that in other competing areas such as Spain, France, Italy and the Caribbean. Answers from our buyers were varied and it seems that the combination of climate, tax advantages, safety, sporting facilities, schools and an outdoor, healthy lifestyle were all important motivators for our buyers. The pandemic has added another aspect. As banks continue to accumulate debt, many of our buyers have told us that they have a reluctance to keep cash in the bank and are keen to make serious investments. Our relatively stable property market is just one of the places benefitting from this. The price of silver and gold has never been higher and serious art is now also in greater demand. Property remains a favourite, especially so for British and Irish investors and with Brexit looming, for many in the UK, a Euro-based asset has even more of an allure.
Further fuelling the local property market are entirely new buyers from new continents. We are currently dealing with an increasing number from the USA and Hong Kong as well as ex-pats from Dubai not wishing to return to chilly northern Europe. Many of these are looking to retire here and or spend a good part of the year here. Interesting is the fact that ex-pats from Spain are now also relocating to Portugal due to the changed taxes in Spain and who are also attracted by our popular NHR scheme.
More and more people are travelling again and as if there was a need for more good news, banks are keen to lend money and the conditions to borrow have never been better.
And we can see this clearly in the increased amount of interest we have received since March. Not only are new buyers investing in property here, but we are also observing how the current climate is motivating people to change the homes they already have on the coast. With the intention of spending more time in the Algarve, people are up-sizing to bigger and more comfortable properties or moving to a better location. We are also seeing an increase in young families moving to the Algarve. Safety has never been more so on the list of priorities than right now.
The increased interest in making serious investments here is further demonstrated in the size, quality and style of properties being developed in the area. And we are not just talking about properties within the Quinta do Lago and Vale do Lobo areas but across the coast. Over recent years, some of the most magnificent properties have been built by families who have relocated to the Algarve, enrolled their children in local schools and who work from home, from here! For their homes, nothing but the best design and materials will do and our Savills colleagues from around the globe agree, these are some of the finest properties they have seen.
To view any of the spectacular properties from our varied portfolio, please visit our website on qp.pt or give us a call on +351 289 396 073!