6 minute read
PROPERTY
TIMES ARE CHANGING
Robert Bijker, managing director of Yellow Homes - Land & Houses Algarve, discusses the recent events surrounding Covid-19 and their effects on the property market
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The Covid-19 pandemic not only caused a severe economic downturn with record unemployment but has also changed the way we are living and working. This with potentially lasting changes in consumer preferences about what an individual and/or family expects from their residential property, the place that we call home. The meaning of a home can differ from person to person but in general it is the place where one lives, secure and enjoyable, where you can laugh or cry, be yourself, learn, love and be loved, be respected and cared for as well as a place to share memories and to make new ones. The lockdown has now added another requirement; it needs to have space or an extra room to work from while being away from the office. It is also important to have a good sized private outdoor space and in case of apartments one should be able to get to the property using the staircase (in order to avoid being in a small enclosed environment; the elevator). If an apartment is in a high rise building the use of a staircase may not be an option for everyone. The increase in video conferencing amongst businesses had already increased pre- Covid-19 due to the various worldwide conferences about global warming and reduction of greenhouse gases. However, the lockdown accelerated and broadened this trend as employees who could work from home were now asked to stay at home. In addition parents with children had to use video conferencing for their children to do their schoolwork due to the closure of the schools. The demand for video conferencing software such as Microsoft Teams, Cisco WebEx and especially Zoom went through the roof (the latter has a good chance of becoming the word of the year, I will Zoom you!). It may well lead to a more permanent change in how we live and work given the option of not going to the office to work (or only a few times per month) we may also change our preference of where we want to live. Coming out of lockdown most people are re-evaluating what freedom means to them and may prefer to live in a low population density area outside of their town or maybe even in a different country providing there are good internet and travel connections. In the past people could not make this decision as there were technological hurdles to overcome (no or slow internet, no video conferencing solutions) as well as the social acceptance by colleagues and businesses to work from home. It will be interesting to see how the pandemic has changed all of this which may lead to new trends in demand for residential property. Early signs are that the desirability of a property with a large terrace or private garden with or without swimming pool has gone up.
low density residential areas. As such, and with a population
eager to follow and obey safety measures, the number of people
affected by Covid-19 as well as the number of casualties are low
in comparison with other countries. Nevertheless many people decided to cancel bookings for holiday letting accommodation
during the months of March, April and May. The closure of
borders, general uncertainty, job losses and health problems
where often the reasons given to cancel reservations. However, in the past 4 weeks reservations have picked up and with the
opening of borders both owners of property and holidaymakers
are starting to return. We have noticed an increase in demand for
villas with a private pool, both for short/long term letting as well
as to buy. The ultra-rich are parking money in high end luxury real estate in cities like New York, London and Paris and often
do not intend to live there whereas high net worth individuals
are seeking good quality villas with a swimming pool in the
Algarve often in established areas to live in. We have also noticed
an increase in demand for this type of property coming from
buyers who indeed want to park money due to negative interest rates on savings of Euro 500.000 and above and are worried about future inflation due to the enormous amounts of money that is being created by central banks worldwide. If you have 2 million in savings you can avoid negative interest rates by spreading the amount in a saving account over 4 or 5 banks. However, for larger amounts this more complicated and it still doesn’t address the worry about inflation. Interest rates of government bonds in many countries are in negative territory all the way up to maturities of 10 years. The rates are artificially suppressed by bond buying by the central banks, aka quantitative easing. A better indicator of fear for inflation is the price of gold, which has been gradually moving upwards from USD 1400 to 1770 over the past 12 months. Hard assets such as real estate are also seen as a hedge against inflation. These type of buyers are worried about inflation, do not want to pay negative interest rates. Other factors such as polarization and rising populism in their home countries may also lead to the preference of spending time in their property in the Algarve. The reasons for investors to buy property in Portugal are as good as ever especially with price reductions. Property is relatively easy to understand and is inflation proof overtime. We are currently living in uncertain times, however the Algarve benefits from many good things that people lack up north and given time may well come out on top of it. We are fully aware that times are changing, watch this space for new eco home offerings. We are in contact with developers who are at the forefront of developing sustainable, low carbon lifestyles without compromising comfort. Register your interest at info@ Homes. We will register your interest and follow up with more information when available to investors. Stay safe and healthy. Yellow Homes – Land & Houses Algarve www.algarvepropertysearch.com www.algarve-portugal-immobilien.de
Vilamoura Office
EN 125, Benfarras Boliqueime 8100 - 068 Boliqueime Tel: 289 301 294
Tavira Office
Rua Dr. José Pires Padinha 178 8800 - 354 Tavira Tel: 281 320 281 (AMI - 6232)
AMI: 6232
THE ONLY MODERN 3 BED VILLA IN VILA SOL UNDER 1 MIO EUROS Located within the Vila Sol golf resort - home to one of the Algarve’s most sought after championship golf courses – this modern three bedroom villa has four bathrooms and is equipped with air-conditioning and underfloor heating throughout. The carefully selected high quality finishing are impressive. The house offers excellent comfort and luxury. Rare opportunity to acquire such a beautiful villa for under 1 Million Euros. Ref TPL / Price: € 965.000 Euro, EC - D Contact us! Our email is info@yellowhomes.com or call us on (+351) 289 301 294 Find out more info on our website www.yellowhomes.com
AMI: 6232
