We're happy to report on some good news coming out of Portugal now.
The newly published 10-10-10 Algarve Residential Tourism Survey 2013 shows that 92 per cent of leading Algarve property agents report higher confidence levels in 2013 and a growing trend to market stabilization.
The survey is a joint project between ILM Group and Property Lynx Chartered Surveyors and is carried out three times per year from data gathered from leading real estate agents across the Algarve.
The first survey of 2013 - covering January to April - found a positive mood in the market and that activities of 'bargain hunters' had dropped considerably in the first four months of the year.
The research found that enquiries, offers and transactions were all up in the first four months of 2013 compared to the end of 2012.
Interest from 'end users' is continuing to increase across the market, accounting for 80 per cent of all enquiries.
Vendors asking prices are starting to reach levels that would attract buyers in the most popular areas. Asking prices on the coast and in large-scale developments seem to have stabilised, whilst all other locations and areas again experienced a reduction of between 5 and 10 per cent.
Growing sales volumes are fuelled by a returning traditional British market, complemented by buyers from 'emerging markets', stimulated by new innovative tax and legal structures.
The British accounted for 55 per cent of purchases, the Swedish 10 per cent and the Russians and Chinese achieved 15 per cent between them indicating that the Golden Visa Scheme and the Non Habitual Regime are probably stimulating demand.
Thirty per cent of demand came from 10 different geographic markets.
Overall 47 per cent of respondents reported that the number of completions was higher in the first four months of 2013 with only 15 per cent reporting a fall.
The higher end of the market in product type and price point appears to be more active - detached villas represented 46 per cent of all sales and volumes were up by 17 per cent compared to the end of 2012.
The inclusion of higher value large scale integrated golf and beach resort developments in the survey has led to some interesting results with 21 per cent of sales being over €2 million, 11 per cent between €750,000 and €2 million, 33 per cent between €250,000 and €750,000, and 35 per cent of sales were below €250,000.
The trend to market stabilisation noted during 2012 seems to be continuing, with no change in prices for apartments on the coastal strip and prices for stand-alone detached villas decreasing by just 2 per cent.
Comparatively prices for detached villas and mansions in recognised resort developments increased by 8 and 5 per cent respectively, albeit a much smaller market segment.
The dominance of 'end user' purchasers continues as speculators move out of the market and the number of properties bought as a holiday home increased again - they now account for 42 per cent of all purchases.
Other key purchasing motives remained stable with primary residence and retirement related buying again accounting for nearly 40 per cent of transactions.
The Algarve market continues to be positively impacted by these key developments: the return of the core British market, new emerging markets driven by favourable and innovative legal and tax structures, increasing availability of mortgage financing and a destination product proposition that is now highly price competitive.
Agents have reported new positive market indicators:
"We have felt consumer confidence is higher and have noticed the type of buyer currently investing in property is almost exclusively the end user. It's not about buying and selling for a quick turnover/profit as buyers are interested in holding on for the next 5-10 years at least," said one.
"Clients have reached the point that they are not prepared to put their lives on hold for a potential change in the market, they would rather buy now and start to enjoy their new property sooner rather than later."
Click here to download the Executive Summary of the report.
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