Bad time for selling?

jaydeemdm2008 · Post by **jaydeemdm2008** » Wed Aug 06, 2008 12:25 pm

Hi!

Is anyone actually buying or selling property in Carvoeiro at the moment? All of the Estate Agents seem to display the same properties for months if not longer. We are now reconsidering whether or not to sell our one bedroomed aparment because it all looks so stagnant. What does anyone else think?

fmm · Post by **fmm** » Wed Aug 06, 2008 1:01 pm

My view isi that if you paid £100k for a property (in euros 150k), then you need to be realistic in what price you want. For example, there is no point saying that it is still work 150k euros to the English market as this is now equal to putting an extra 30000 euros on the price. With me so far?

So if you want to get your money back, you need to price the property at Euros 120k to get back your initial £100k.

The problem is that anyone outside the Euro (i.e. the english) are finding the increase in price due to the poor sterling/euro exchange rate is not worth doing.

When I bought my property 3 years ago it had been on the market for about 12 months. In my apartment block several properties have been bought and sold over the past few months, so they are moving. I just feel that you need to be realistic about prices.

sanreen · Post by **sanreen** » Wed Aug 06, 2008 2:00 pm

I think the problem could lie with who you sell it to. If it is a British buyer then it could be priced too high, but on the other hand if it is a european dealing in euros, they may pay the higher price??

Gary/Gaynor · Post by **Gary/Gaynor** » Wed Aug 06, 2008 2:52 pm

Not in Holland they won't, it's hitting even here, with properties starting to stay on the market a lot longer. In our area it used to be within 6 weeks of marketing now we see 3 months and longer, in Dutch terms that's a pretty long time.
It will start to bite everywhere in Europe eventually. Price realistically you may have a chance in selling.
Gaynor

jaydeemdm2008 · Post by **jaydeemdm2008** » Wed Aug 06, 2008 3:36 pm

Is it worth having the asking price actually in Sterling then - are the main potential buyers going to be Brits in the future?

R.Wethereyet · Post by **R.Wethereyet** » Wed Aug 06, 2008 3:41 pm

The market has certainly collapsed this year for resale properties, but new ones are still moving albeit not as quickly as previous years.

The main problem apart from the exchange rate is that the mentality amongst builders, many local agents and owners over here, that most buyers will pay a premium for an Algarve property. This may have been true in the past, but with over development in many areas and a lack of infrastructure to cope with it, these buyers and investors are now looking elsewhere.

Furthermore, the Algarve is no longer a value for money destination, so many visitors including golfers, who have always had the area as their number one choice have gone elsewhere. This has has had a knock on effect, and meant that many rental properties have been empty for most of the year, and the owners are now desparate to try and sell, but at unrealistic prices. This has meant an over supply of property on the market, at a time when most of Europe is either in or heading for a recession.
One only needs to look at CVO this year, where the number of visitors is well down, and currently estimated to be somewhere between 15% - 20% less than last year.

Hopefully things will change for the better in the not too distant future, and the Algarve will once again be the number one destination to live and holiday.

Bruce Wallis · Post by **Bruce Wallis** » Wed Aug 06, 2008 4:33 pm

I still believe that buying anywhere abroad needs to be a 10 year investment.

The Sunday Times list 2 years ago, put the Algarve in the top 3 ten year investments.
On that basis the Algarve, and Carvoeiro especially still hold true to that.

Anybody who dives out of a sliding market will almost inevitably take a hit.

Mind you, it's a good time to buy, because you can force an exceptional deal in a buyers market. That must certainly be the case in some of these overpriced golfing condos.

If you can afford to....hang in there.

Gary/Gaynor · Post by **Gary/Gaynor** » Thu Aug 07, 2008 7:47 am

Your right Bruce, Gaz and I are looking to the long term (retirement especially) Just looking around for villas at the moment to see what is out there and looking at the market in general but with each agent we have come across they are still in the mind set of high prices. They are telling us the Algarve is the exception to the rest of Europe at the moment. We have seen some but have not been very encouraged to put in offers, they tell us that owners are not interested in what they refer to as 'silly offers' so how the hell do you start the bargaining process. sometimes wonder if the owners ever get to know about interested parties. This is all about commission I know, which is understandable. Even Portugal is not imunne to all of this. Think we'll just hang on to what we have at the moment see how it all pans out.
Gaynor

Bruce Wallis · Post by **Bruce Wallis** » Thu Aug 07, 2008 8:14 am

If that is the truth that the estate agents are telling you, Gaynor, why are their sales so flat at the moment?
My contacts in Carvoiro tell me that sales figures are well down this year.

You only have to read this forum to realise that people are worried about sales levels and falling prices.

The big hope was that the Irish would move into the market with the strong euro, but their economy is now slipping faster than ours. An article yesterday said that the Celtic Tiger of europe is becoming the whimpering moggy!

I bet if you advertised for a villa in the Resident, you'd have your arm ripped off!

Gary/Gaynor · Post by **Gary/Gaynor** » Thu Aug 07, 2008 9:32 am

Truth is Bruce they want the commission and the higher the better on a sale, so they will tell you anything. I can name two property agents that told us that the market is still boyant enough to offer pretty much the asking price,

but not sure if I am allowed on this forum. Well we'll keep looking.
Gaynor

jaydeemdm2008 · Post by **jaydeemdm2008** » Thu Aug 07, 2008 12:08 pm

Who are the target buyers then for the Algarve - if the Celtic Tiger is now a kitten and the British Bulldog is a mere pup?

It seems that the situation has become stalemate with all the contradictory signals - i.e. optimistic estate agents and media predictions versus the word on the street.

If it's a buyer's market it seems strange that we have had no interest whatsoever in our very low priced property in the centre of the village since we put it on the market a few months ago.

Gary/Gaynor · Post by **Gary/Gaynor** » Thu Aug 07, 2008 12:52 pm

Banks aren't eager to lend at the moment so your target market are cash buyers, but even then they are demanding even more for their money. That's my observation anyway, but I could be wrong.
Gaynor

SJ & RE · Post by **SJ & RE** » Thu Aug 07, 2008 3:45 pm

With the latest reports from finance in London and the states it looks as though the rest of Europe will be catching up on us in a ressession. I am expecting prices to fall somewhat in the Algarve and beyond over the next 24 months.This will be at about 20-30% from todays prices which are heavily inflated in Europe and the Algarve at present. The UK will still have a fall of at least another 5-15% over the next 18 months.
Banks will still be vigilant on selling mortgages and looks as though the 5-6 times salary for mortgages has long gone. It has returned to the sensible 3 -3 and a half times salary for a mortgage, however one can buy very little with that structure , even if you do manage to have a hefty deposit etc. Those who wish to do it as a buy to let via an offset mortgage on their UK property are in for a big shock, as this movement has now been stopped by the majority of banks and other lenders.
Those who bought a few years and beyond ago are riding high as long as they do not wish to sell over the next 3 years at least. As someone said, purchasing a property abroad should be seen as a very long term proposition. You will be quids in with that view, its not a get rich quick scheme.
However, this does not help those like us who wish to purchase relatively soon. Our plans are fairly fluid with little in time constraints, so we may well suck it and see what happens
over the next 12 months or so.

Gary/Gaynor · Post by **Gary/Gaynor** » Thu Aug 14, 2008 7:54 pm

Ok not one to scare anybody but in the good old IOUSA in the month of July 77,295 properties were foreclosed and a record 272,000 were waiting to be foreclosed. This Tsunami is approaching Europe so if we go with the sums you put down 20% deposit and borrow 3.5 times yours wage the average one can buy a house for is about 100,000 pounds. The average house in the UK is about 175,000 pounds. By the way the average house price in the good old IOUSA is 205, 000 dollars maybe around 120,000 pounds and is still dropping. House prices last time in the UK started dropping around 1989 and did not recover until 1999. Im sure some oldies can remember this !! My gut feeling is this time it may be just as bad ..... maybe worse

Have a nice evening

Gary

Gerry Cullen · Post by **Gerry Cullen** » Thu Aug 14, 2008 10:06 pm

Maybe this is the time to start looking at property in the states,...more bang for your bucks.
Last week a leading Irish mortage lender stated they would lend no more then 70% of the purchase price for an investment property within city limits of the five big irish cities ,and no more then 50% for all others.
Two years ago they were offering 110% regardless. Looks like the days of cheap, freely available credit are over.