4 minute read
2020 SO FAR
from SAM October 2020
THIS YEARS EFFECTS ON PROPERTY
Robert Bijker, managing director of Yellow Homes - Land & Houses
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Algarve, discusses the current situation in the property market
Autumn has just started, which is historically the ever changing rules and restrictions regarding travel and a good time for buying and selling property quarantine measures. The number of people visiting the Algarve in the Algarve. In October you often have in the past 9 months is sharply lower than previous years, having beautiful weather with plenty of sunshine and a a negative effect on the hospitality and real estate sector alike. comfortable temperature of between 20 – 25º The transaction volume of property sales in the Algarve took degrees Celsius. For those who prefer to avoid a nosedive in Q2 2020, down 38% year on year (y.o.y). The the summer rush and heat it is an ideal time to economic downturn also saw a growing number of people plan for a stay in the Algarve. becoming unemployed with the Algarve region being the most There still remains a lot of uncertainty caused by Covid-19 and affected. Although the number of people employed in August
178%. This is particularly worrying as we are now entering the
autumn and winter period.
On a positive note business confidence in Germany and
France, the two largest economies in the Eurozone, has risen to the highest level in seven months despite concerns about
rising coronavirus infection rates. They are considered leading
indicators of future economic activity. In Germany the index rose
from 92.5 in August to 93.4 in September where as in France the
index rose from 90 to 92 over the same period. It may come as no surprise that investors from both countries
have been active buyers of property in the Algarve over the
past nine months. Demand for quality villas with pools and
penthouse apartments on good locations held up well, in
particular in the higher price segment. These buyers are likely to
be less affected by the economic uncertainty, they are mostly cash buyers and are faced with negative interest rates on their savings accounts in their home countries. They are often high net worth individuals who want to diversify their investment portfolios away from the usual 60% bonds / 40% equity asset allocations, a strategy which has worked well for decades. However more and more people are starting to have doubts whether this strategy is appropriate in an ultra-low interest rate environment. Demand for property within the 150.000 – 250.000 euro price range has decreased over the same period as these buyers are likely to be more affected by the economic uncertainty. At the moment there are many prospective buyers in the Algarve, which is also noticeable in the demand for long stays and long term rental accommodation. Knowing that only few buyers will ever buy a property without having seen it, it is important that they are able to visit the region. However, there is a risk that airlines will reduce their capacity as demand seems to be slowing down due to increasing number of Covid-19 infections and the return of restrictions. Ryanair has just announced an additional 20% reduction in capacity for October which is on top of an earlier announced reduction of 20%. It is likely that other airlines will follow, most are already operating with a 50 – 60% capacity reduction versus 2019. At this moment it is not clear what the impact will be on the number of flights to Faro but it is clear that if people cannot or do not want to travel that this will have a negative impact on demand for property. However for real estate agencies such as Yellow Homes - Land & Houses Algarve with a good local and international reach there will always be clients looking to buy a property. If you are the owner of a good quality property and would like to sell, please contact us. 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
DETACHED MODERN 4 BEDROOM PROPERTY ON A LARGE, PRIVATE PLOT NEAR LOULE This very attractive 4-bedroom single floor villa in the central Algarve is beautifully set on a generous plot of just over 7000m2 in a tranquil setting and with beautiful countryside views. The property, built in 2002, is located just a short drive away from the bustling market town of Loule and from Almancil, and therefore close to some of the best beaches, golf courses and all amenities. Ref : DZO Price: ¤875.000 Energy efficiency E 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
