Searching for a bargain villa or apartment (or, in fact, any type of bargain property) in the Algarve has become akin to searching for a needle in a haystack. This comes as a great surprise to many potential purchasers, but there are a number of reasons for this.
High base costs Unlike many parts of the world, such as Florida and many Eastern European countries, land is in short supply in the Algarve and development is tightly controlled. When you combine this with modern construction techniques and the higher costs these entail (there are no cheap timber framed houses clad in plasterboard and built in a matter of days in the Algarve), the net result is a high residual value.
Supply and Demand One of the oldest principles in economics is the balance between supply and demand and how this affects a market.
In the sectors of the Algarve property market where demand is currently much lower than supply there are still some bargains to be snapped up. This is noticeable mainly in the primary habitation sector, and is also true for apartments and townhouses on condominiums. An example of this is a new, modern two bedroom apartment in Vilamoura, adjacent to a Five Star resort and golf course, reduced from 340.000€ to 225.000€. Link for more details: http://azul-properties.com/azul-properties/view.asp?ref=1001-1033
As the scales of supply and demand start to balance in other parts of the market, this pressure on sale prices is reduced. There is still a constant demand for houses with a minimum of 3 bedrooms, private land and a pool, and as a result of this prices in the middle and upper sectors of the market have held fairly steady.
Once we move away from the more popular areas, and start to go inland where there is less demand, prices weaken again. We have recently listed a property which consists of a 4 bedroom house, with a separate 2 bedroom annex, swimming pool, large barn/garage and 16.000m2 of land. This property is just over 30 minutes drive to the coast, but not in a sought after area. To ensure it sells, it has been priced at a very realistic 375.000€
When we move to the opposite end of the scale, and examine properties that are extremely desirable and in short supply, there is no reduction in prices or vendors expectations. We have been instructed to sell a newly built 3 bedroom house, with a pool on the beach at Praia do Vau, literally 50m to the beach, with fabulous sea views. Properties like this only ever come to the market once in a blue moon, and the price of this beach house (€1.25m) reflects this.
“Speed” of the Algarve property market The property market in the Algarve has always moved at a snails pace, with houses taking months (ans sometimes years) to sell. Vendors are used to waiting for properties to sell, and usually have a “plan B” to allow them to bide their time. This can range from living in a property whilst it is for sale, to renting the property whilst it is on the market.
The fact that the global markets are slower means that the Algarve market is also slower, but the difference in the Algarve is that the majority of vendors had already planned for this.
Repossession, Repossession, Repossession It is a little known fact that the Portuguese system of repossessions does not works quickly, and is heavily biased in favour of the owner of a property. When a bank wants to repossess a property, the process takes years, not months. A bank´s first approach here is normally to negotiate a payment agreement with the owner. If this fails, lengthy legal proceedings are necessary to repossess a property.
As a direct result of this, there are very few repossessed properties on the market here, which has the double effect of reducing the pressure on owners who are struggling to pay their mortgage and also preventing properties at bargain prices coming on to the market.
And so? If you want to find a bargain property in the Algarve, flexibility is the key. There are some bargain properties out there, but be prepared to compromise if you want a bargain.
Our advice is to do your research, make sure you define a shortlist of requirements, and then ensure you are ready to buy and negotiate on that basis.
For more information and properties for sale throughout the Algarve, please visit our website http://www.azul-properties.com
Property Market Report
10-08-2010
Our market report for July has been completed, and includes reduced price properties as well as market information. more
Loulé Ring Road opened
3-Aug-2010
The ring road around Loulé was finally opened last week. more
Algarve Property Update
24-May-2010
Our property market update for April has now been published, with reduced price and new properties and market commentary. more
Algarve Property
22-Mar-2010
Our February update has now been published, with reduced price and new properties and market commentary. more
Azul Properties Office Move
2-Mar-2010
We have moved and updated our Loule office. more
Algarve Property Update
17-2-2010
Our January update has now been published, with reduced price and new properties and market commentary. more
Algarve Property Market
09-Feb-2010
We have published our commentary regarding the outlook for the Algarve property market during 2010. more
Property Market Report 2009
15-Jan-2010
Our comments and report regarding the Algarve Property Market for 2009 have now been issued. more
Azul Properties on Twitter
25-Jan-2010
We have launched a twitter feed, giving up to date Algarve property information. more
New properties for sale
8-Jan-2010
We have a number of new properties which have been added to our portfolio recently. more
New properties for sale
13-Nov-2009
We have a number of new properties which have been added to our portfolio recently. more
Christmas Holidays
19-Dec-2009
Our office will be closed for Christmas at the following times. more
Reduced price properties
4-Nov-2009
During October 2009 we have some properties available at reduced prices. more
Halloween in Loule
03-Nov-2009
Algarve news: Halloween was celebrated in style in Loule this weekend. more
Properties with reduced prices
14-Oct-2009
We have some properties with prices that have been reduced during September. Our latest property market summary has also been published. more
Get Real Radio
23-Sep-2009
We will be participating in the Algarve FM talk show at 8pm on the 24th September. more
Price reductions-August
09-Sep-09
We have a number of properties with reduced and flexible prices, altered during August. more
Property Exhibition-Utrecht
9-Sep-09
We will be attending the SecondHome exhibition in Utrecht, Holland. more
Price Reductions-July
17-Aug-2009
During the month of July, we have had some property price reductions, and other properties where the owners will consider offers. more
Price Reductions-June
9-July-09
We have some properties with reduced prices, and others with flexible prices. more
Price Reductions-May
15-Jun-2009
During May 2009, the following properties have had their prices reduced. more
Palmeiras Resort
5-Jun-2009
Azul Properties is pleased to announce that a major advance has been made in respect of the prestigious Palmeiras Resort in Tavira. more
Querenca-New land zoning
27-May-2009
The Plano de Pormenor (detailed plan) for Querenca is in public discussion. more
Price Reductions-April
5-May-2009
During April 2009, the following properties have had their prices reduced. more
Price Reductions-March
10-Apr-2009
During March 2009, the following properties have had their prices reduced. more
Price Reductions-January
28-Jan-2009
During January 2009, the following properties have had their prices reduced. more
Land Registry Online
19-Jan-09
The Registo Predial (Land Registry) now has many online services available. more
Energy Certificates
7-Jan-09
As of the 1st January 2009, energy certification (Certificação Energética) must be provided by anyone who is selling or renting a property in Portugal. more
Price Reductions-December
07-Jan-2009
During December 2008, the following properties have had their prices reduced. more
Market Commentary
21-Oct-2008
Our opinion regarding the current market conditions has now been published. more
Christmas Holidays
18-Dec-2008
Our office will close for Christmas holidays on the following days. more
Price reductions-September
21-Oct-2008
During the months of August and September, the following properties have had their prices reduced. more
Capital Gains Tax Update
18-Aug-2008
Algarve news: A new ruling allows for more expenses to be deducted from capital gains. more
Price reductions-May
04-Jun-2008
The following properties have had their prices reduced in the last month. more
Price reductions-June
30-Jun-2008
During the month of June, we have a number of properties whose price has been reduced. more
Price reductions
19-May-2008
We have a number of properties in our portfolio whose prices have been recently reduced. more
Online IMT calculation
27-July-2007
IMT (formerly known as SISA) can now be calculated on our web site. more
Loulé PDM updated
15-Jan-2008
Algarve news: In line with Protal, the PDM for the council of Loulé has now bee revised. more
Prestige Property Website
24-May-07
Our new website, to promote prestige and luxury properties in the Algarve, has been completed. more
Missing girl
22-May-07
A young girl, Madeleine McCann, has been missing since the 3rd May. Please visit www.findmadeleine.com to see if you can help. more
Prestige Property Website
9-Apr-07
We are currently designing a new website, dedicated to the promotion of prestige properties. more
Trespasse Update
26-Jan-2007
We have had a number of queries from clients regarding the recent changes in legislation that affect the trespasse system of ownership. more
18-12-2006
Our office will be closed for Christmas at the following times. more
Property Price Reductions
19-Sep-2006
As we are now entering the time of year when the property market is quieter, we are able to offer a number of properties whose prices have been reduced to increase the chances of a sale in the latter part of this year. more
Business Factsheet
2-Aug-2006
We have released a new factsheet dealing with the intricacies of buying commercial property and starting a business in Portugal. more
Price reductions
25-July-2006
We are able to offer some very good value properties, now reduced in price. more
Mortgage Update
7-July-2006
Many changes have been made to the types of mortgages now available for non-residents. more
Bargain Properties
16-May-2006
We are able to offer two substantial properties whose prices have been reduced for a rapid sale. more
Currency Exchange
16-Apr-2006
We have formed an alliance with Travelex, the world's largest foreign exchange specialist to provide our clients with fast, efficient and cost effective currency exchange solutions. more
New Mortgage Offers
11-Jan-2006
New mortgage products have been launched/revised here in Portugal in January 2006. These loans are available to non-residents, and are designed to appeal to those wanting to invest in property in Portugal. more
A Place in the Sun
6-Jan-2006
Once again, the Channel 4 television programme “A Place in the Sun” has highlighted Portugal as one of the best places in Europe for property investment. more
Website Update
09-Nov-2005
We have updated many areas of our website, adding a number of new items and updated information. more
Mortgages for non-residents
26-Oct-2005
We have expanded the range of mortgages we can offer to non residents, with rates below 3%. more
Christmas Holidays
21-Dec-2005
Our office will be closed for Christmas at the following times. more
All Change!
23-Aug-2005
Azul Properties now operating as an independent Real Estate Agent. more
Market Report Released
29-Apr-2005
Our market report, considering the current status of the property market in the Algarve is now available. more
New furnishing partner
14-Dec-2004
We have negotiated a deal to provide high quality interior solutions for our customers. more
New golf course opens
14-Sep-2004
The Arnold Palmer designed Victoria Golf course has opened in Vilamoura. more
Online IMT calculation
25-Nov-2004
We now have a facility to calculate IMT (SISA) on our website. more
New Regulations
16-Aug-2004
As of the 16th August, a new law is in force requiring all new houses to have a BI (passport). more
New Properties for sale
31-May-2010
We have a number of new properties which have been added to our portfolio recently. more
