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Economic situation
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shanagarry
- CVO Legend
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- Joined: Tue Jul 27, 2004 7:26 pm
- Location: Craigweil-on-Sea
Economic situation
Not wishing to be the harbinger of doom and gloom - I feel I have to expose a myth that is being perpetuated around The Algarve at present - that all is fine and well in the big wide commercial world we live in.
I received an e-mail Newsletter yesterday from a firm of estate agents based in Lagoa who recently received an award for some major accomplishment - I have no idea what it is they did apart from 'selling' property. Anyway this latest piece of uplifting information advises the reader(s) that 'investment is pouring into the Algarve, which is encouraging news at a time when many business owners in the region are worried that trade has fallen' and goes on to further advise that approval has been given for 15 PIN construction projects with some astronomical value. If anybody is interested PM me and I will forward you the link to get the newsletter.
Before I go on let me say - I hope all this comes to pass and that the economy in The Algarve as well as everywhere in Europe does rise up from its current low and soon.
As an active businessman based in the UK I watch all the economic pointers each day and have just seen on the Irish news that two of their major banks are within inches of their lives. So what, you might say...
Those banks and others will be those who would have willingly doled out mortgage funds to those wanting to buy property in The Algarve with gay abandon in the not too distant past.
The purpose of my post is to enquire from all you enlightened people in the Carvoeiro area - where will the buyers for the properties being built under these schemes get the financial facilities to buy them?
The President of Benfica (Luis Felipe Viera) is reported as planning to invest €220M in a Lagoa project. He could buy a few Ronaldos for that sort of money.
Now I might have missed something here - but has The Algarve got a 'stash' of cash or some magical formula that passed me by without an invitation to participate?
Sure enough there will be a time in the future when all the current shenanigans are a painful memory and house buying will restart in earnest but if the experts are to be believed that is at least 3 years away - what happens in the meantime with all these €1M + properties looking for absent buyers?
If the Irish, the British and the Germans with their unprecedented levels of unemployment are unable to buy - who will be in front of you in the Lidl/Intermarche/Continente/Modelo queue, apart from our Portuguese hosts?
Any ideas folks
I received an e-mail Newsletter yesterday from a firm of estate agents based in Lagoa who recently received an award for some major accomplishment - I have no idea what it is they did apart from 'selling' property. Anyway this latest piece of uplifting information advises the reader(s) that 'investment is pouring into the Algarve, which is encouraging news at a time when many business owners in the region are worried that trade has fallen' and goes on to further advise that approval has been given for 15 PIN construction projects with some astronomical value. If anybody is interested PM me and I will forward you the link to get the newsletter.
Before I go on let me say - I hope all this comes to pass and that the economy in The Algarve as well as everywhere in Europe does rise up from its current low and soon.
As an active businessman based in the UK I watch all the economic pointers each day and have just seen on the Irish news that two of their major banks are within inches of their lives. So what, you might say...
Those banks and others will be those who would have willingly doled out mortgage funds to those wanting to buy property in The Algarve with gay abandon in the not too distant past.
The purpose of my post is to enquire from all you enlightened people in the Carvoeiro area - where will the buyers for the properties being built under these schemes get the financial facilities to buy them?
The President of Benfica (Luis Felipe Viera) is reported as planning to invest €220M in a Lagoa project. He could buy a few Ronaldos for that sort of money.
Now I might have missed something here - but has The Algarve got a 'stash' of cash or some magical formula that passed me by without an invitation to participate?
Sure enough there will be a time in the future when all the current shenanigans are a painful memory and house buying will restart in earnest but if the experts are to be believed that is at least 3 years away - what happens in the meantime with all these €1M + properties looking for absent buyers?
If the Irish, the British and the Germans with their unprecedented levels of unemployment are unable to buy - who will be in front of you in the Lidl/Intermarche/Continente/Modelo queue, apart from our Portuguese hosts?
Any ideas folks
I don't believe that the super rich who buy €1m+ villas are remotely concerned about unemployment or the credit crunch, save for the fact that they can no longer earn any interest on their savings.
That being the case,and with developers ever more anxious to do a deal, maybe it's an excellent time to buy.
As ever, in difficult times, i regret that it is the poorest in our society who are worst affected while the rich carry on regardless.
That being the case,and with developers ever more anxious to do a deal, maybe it's an excellent time to buy.
As ever, in difficult times, i regret that it is the poorest in our society who are worst affected while the rich carry on regardless.
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shanagarry
- CVO Legend
- Posts: 2048
- Joined: Tue Jul 27, 2004 7:26 pm
- Location: Craigweil-on-Sea
Economy
Cereza
I love your optimism - but forget about things getting better next year - when UK unemployment hits 2m by April next year - Clueless Gordon, will be looking for work as well as all the others - when he realises he has given away all the family silver and has nothing to show for it
Follow this link and read a very accurate assessment and prediction by Rpbert Peston - I don't think this prediction is too far from reality http://www.bbc.co.uk/blogs/thereporters/robertpeston/
As for the rich and mighty not being bothered about the situation - you can rest assured that Clueless Gordon and his minions will be on their case looking to bolster their tax take to make up for all the 'give-aways'.
The Irish government are at it already because they too have guaranteed banks with money they don't have and to add 'salt to the wound' the strong Euro is of no benefit to them given their dependency on UK exports. The same can be said of other European countries who have enjoyed good trade with the UK during the 'good times' - it's a totally different ball game now.
Regretfully - this situation is going to get an awful lot worse before we see any green shoots of recovery and when we do - it will be a totally different landscape that emerges.
Happy Christmas
I love your optimism - but forget about things getting better next year - when UK unemployment hits 2m by April next year - Clueless Gordon, will be looking for work as well as all the others - when he realises he has given away all the family silver and has nothing to show for it
Follow this link and read a very accurate assessment and prediction by Rpbert Peston - I don't think this prediction is too far from reality http://www.bbc.co.uk/blogs/thereporters/robertpeston/
As for the rich and mighty not being bothered about the situation - you can rest assured that Clueless Gordon and his minions will be on their case looking to bolster their tax take to make up for all the 'give-aways'.
The Irish government are at it already because they too have guaranteed banks with money they don't have and to add 'salt to the wound' the strong Euro is of no benefit to them given their dependency on UK exports. The same can be said of other European countries who have enjoyed good trade with the UK during the 'good times' - it's a totally different ball game now.
Regretfully - this situation is going to get an awful lot worse before we see any green shoots of recovery and when we do - it will be a totally different landscape that emerges.
Happy Christmas
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shanagarry
- CVO Legend
- Posts: 2048
- Joined: Tue Jul 27, 2004 7:26 pm
- Location: Craigweil-on-Sea
Widge
You are spot on with your comment suggesting it being the right time to buy property - but what are the 'super-rich' going to do with it?
Rent it? To who?
If we are to believe 50% of the predictions being made by the economists here in the UK - the rising levels of unemployment allied to the strong Euro will put the kibosh on European holidays in 2009.
Having spoken to colleagues and friends in Ireland and Holland - their outlook is even more bleak than the UK.
I raised the subject in the hope somebody could shed some light on the logic behind the mega investments being spoken/written about that the rest of us mere mortals may have missed.
Seemingly not
You are spot on with your comment suggesting it being the right time to buy property - but what are the 'super-rich' going to do with it?
Rent it? To who?
If we are to believe 50% of the predictions being made by the economists here in the UK - the rising levels of unemployment allied to the strong Euro will put the kibosh on European holidays in 2009.
Having spoken to colleagues and friends in Ireland and Holland - their outlook is even more bleak than the UK.
I raised the subject in the hope somebody could shed some light on the logic behind the mega investments being spoken/written about that the rest of us mere mortals may have missed.
Seemingly not
Yes, I agree that European holidays and indeed North American holidays will be at a massive premium next year.
The villa rental market will suffer accordingly and, i expect, so will the local economy.
Many economists anticipate significant rises in inflation from 2010 if this is coupled with zero or negative growth in the economy then we will suffer the dreaded stagflation, probably the most destructive economic condition possible.
Thankfully Gordon Brown (our illustrious unelected leader) will be working for an investment bank by then- assuming some survive! No doubt making a scandalous sum profiting from the destruction of the UK middle classes which he has so brilliantly masterminded.
The villa rental market will suffer accordingly and, i expect, so will the local economy.
Many economists anticipate significant rises in inflation from 2010 if this is coupled with zero or negative growth in the economy then we will suffer the dreaded stagflation, probably the most destructive economic condition possible.
Thankfully Gordon Brown (our illustrious unelected leader) will be working for an investment bank by then- assuming some survive! No doubt making a scandalous sum profiting from the destruction of the UK middle classes which he has so brilliantly masterminded.
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shanagarry
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- Joined: Tue Jul 27, 2004 7:26 pm
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Shanagarry - you obviously have not read my postings in the General Carvoeiro section under "The pound in your pocket"- I have nothing but contempt for our great leader who I believe is the prime culprit for our economic malaise and my reply to your topic was an attempt at sarcasm !!!
Thanks for the link to the article by Robert Peston but I have absolutely no time for this man who is a closet Brown supporter and whose voice causes me to switch channels every time I hear it- he is soo typical of the modern BBC.
I like you fear the worse and I just pray that enough people come to see just what this government has done and vote them out of office at the earliest opportunity
Happy New Year!!!!!!!!!!!!
Thanks for the link to the article by Robert Peston but I have absolutely no time for this man who is a closet Brown supporter and whose voice causes me to switch channels every time I hear it- he is soo typical of the modern BBC.
I like you fear the worse and I just pray that enough people come to see just what this government has done and vote them out of office at the earliest opportunity
Happy New Year!!!!!!!!!!!!
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shanagarry
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- Joined: Tue Jul 27, 2004 7:26 pm
- Location: Craigweil-on-Sea
Cereza
You are right I have not read your post in other parts of this site - I tend to stick to Property Owners section - where you usually get a more intelligent level of input.
I wholeheartedly agree with your assessment of Clueless Gordon although I have serious doubts about the calibre and ability of the alternative - they are all much of a muchness.
I am not a Liberal by any stretch but I have a great deal of admiration for the way Vince Cable has handled himself during this crisis - he stands head and shoulders above the rest and makes enormous sense.
Time will tell - anyway thank you for taking the time to share your views although we never go to the bottom of the millions being pumped into construction in The Algarve despite the dearth of buyers.
As for Peston - it makes interesting reading and is not too far wide of the mark.
You are right I have not read your post in other parts of this site - I tend to stick to Property Owners section - where you usually get a more intelligent level of input.
I wholeheartedly agree with your assessment of Clueless Gordon although I have serious doubts about the calibre and ability of the alternative - they are all much of a muchness.
I am not a Liberal by any stretch but I have a great deal of admiration for the way Vince Cable has handled himself during this crisis - he stands head and shoulders above the rest and makes enormous sense.
Time will tell - anyway thank you for taking the time to share your views although we never go to the bottom of the millions being pumped into construction in The Algarve despite the dearth of buyers.
As for Peston - it makes interesting reading and is not too far wide of the mark.
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shanagarry
- CVO Legend
- Posts: 2048
- Joined: Tue Jul 27, 2004 7:26 pm
- Location: Craigweil-on-Sea
many probably most of the villas here are second even third holiday homes...therefore if someone has say 300.000 to invest in a home for a few weeks use a year then they are not affected by economic worries compared to say someone in the uk who has lost their job and HAS to sell
from what one agent told me here is that those who have taken out mortgages to buy here are those who are and will be affected
also in contrast to spain which if memory serves me some years ago built more dwellings in one province than in the whole of france germany and italy combined ...I know there is over building here but not quite that bad
also the algarve has alternative buyers who come here ...russia, germany, dutch, etc..so maybe they will buy when people from the uk wont or cant
from what one agent told me here is that those who have taken out mortgages to buy here are those who are and will be affected
also in contrast to spain which if memory serves me some years ago built more dwellings in one province than in the whole of france germany and italy combined ...I know there is over building here but not quite that bad
also the algarve has alternative buyers who come here ...russia, germany, dutch, etc..so maybe they will buy when people from the uk wont or cant
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shanagarry
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- Joined: Tue Jul 27, 2004 7:26 pm
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The economy
Shannagary I do share your opinion of Vince Cables contribution to the economic debate but he will never be able to partake in government whilst he remains with the unelectable Liberals. The Tories have been depicted as economic lightweights by the Labour spin machine but who can believe anything that they spout? Brown has reverted to old labour philosophy and so for the first time in many years the current Tory position is quite different from the Governments and gives a clear choice. Labour tries to depict Camerons inexperience as a liability yet applauds the election of Obama in the USA ! I believe that the only hope is to get rid of Labour as soon as possible before they put our economy even further into the mire and the only feasible alternative is Cameron and his party.
I have no answer to your question about the construction in the Algarve - I cannot imagine that any private company would enter into large scale construction work in the current climate nor would they obtain the finance even if they were so minded so I can only assume that this work is ultimately backed by the government - maybe they are following Browns "Save the world philosophy!
The property situation in Spain is a lot worse than in the Algarve because of the huge oversupply and because there a far more ex-pats there who were attracted by the lower prices. Although there is much sympathy for those who retired to the sun and now find themselves in trouble it must be said that there was always a foreign exchange risk of which they should have been fully aware. I believe that the great majority of ex-pats in Portugal are not so vulnerable and that the percentage of distressed property sellers is far less than that in Spain. Having said all that I cannot envisage a rush of buyers coming to the Algarve until the world economy recovers but apart from the few distressed sellers I don't envisage offer prices dropping excessively resulting in a dearth of sales which like in the UK spells the end for many estate agents.
I have no answer to your question about the construction in the Algarve - I cannot imagine that any private company would enter into large scale construction work in the current climate nor would they obtain the finance even if they were so minded so I can only assume that this work is ultimately backed by the government - maybe they are following Browns "Save the world philosophy!
The property situation in Spain is a lot worse than in the Algarve because of the huge oversupply and because there a far more ex-pats there who were attracted by the lower prices. Although there is much sympathy for those who retired to the sun and now find themselves in trouble it must be said that there was always a foreign exchange risk of which they should have been fully aware. I believe that the great majority of ex-pats in Portugal are not so vulnerable and that the percentage of distressed property sellers is far less than that in Spain. Having said all that I cannot envisage a rush of buyers coming to the Algarve until the world economy recovers but apart from the few distressed sellers I don't envisage offer prices dropping excessively resulting in a dearth of sales which like in the UK spells the end for many estate agents.
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shanagarry
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Cereza - you are pushing on an open door - I whole-heartedly agree with your sentiments. I do have a grave concern as to Cameron's ability - he is another version of Blair and that does not bode well.
However, my question came to be because at 60 we have decided after over 20+ years holidaying in Carvoeiro (12 as property owners) to move to Carvoeiro permanently - once we have had some major enlargement and modernisation work carried out on our property (for which planning permission was granted this week).
We are reversing the process we have lived with for the past 12 years and will be renting our UK property making Carvoeiro our permanent residence
Barring some major ill-health or financial catastrophe this will probably be the last move we make. As part of my 'due-diligence' I am (foolishly some friends have said) trying to get a feel for the way things may shape up in Portugal and the UK. I will continue to work in the UK and the US long after we make the move south - so need to be looking out for obvious 'storm clouds'.
When I read of major investment announcements at a time when all around us is 'crumbling' it begs the questions I posed. There was a similar alarm sounded in Portugal in 2003 when the Offshore 'balloon' went up - unemployment was going to increase - investors would look elsewhere etc, etc - but while it slowed things down a little - activity in the general economy may have faltered a tad, things readjusted and normal service was soon restored - well sort of!
The situation we are all encountering now is most definitely going to be life changing for many - not least those poor unsuspecting souls who are now looking at a worrying future due to the dilution of their pensions, savings and investments as a result of the weak Sterling/Euro exchange rate.
In the perfect world, living in a country that is not burying itself in oceans of debt, has a healthy economy and enjoys sustainable employment levels - is the utopian wish of all of in this part of the world - I am hoping and praying that Portugal will keep its economic 'head' above water in the years ahead.
However, my question came to be because at 60 we have decided after over 20+ years holidaying in Carvoeiro (12 as property owners) to move to Carvoeiro permanently - once we have had some major enlargement and modernisation work carried out on our property (for which planning permission was granted this week).
We are reversing the process we have lived with for the past 12 years and will be renting our UK property making Carvoeiro our permanent residence
Barring some major ill-health or financial catastrophe this will probably be the last move we make. As part of my 'due-diligence' I am (foolishly some friends have said) trying to get a feel for the way things may shape up in Portugal and the UK. I will continue to work in the UK and the US long after we make the move south - so need to be looking out for obvious 'storm clouds'.
When I read of major investment announcements at a time when all around us is 'crumbling' it begs the questions I posed. There was a similar alarm sounded in Portugal in 2003 when the Offshore 'balloon' went up - unemployment was going to increase - investors would look elsewhere etc, etc - but while it slowed things down a little - activity in the general economy may have faltered a tad, things readjusted and normal service was soon restored - well sort of!
The situation we are all encountering now is most definitely going to be life changing for many - not least those poor unsuspecting souls who are now looking at a worrying future due to the dilution of their pensions, savings and investments as a result of the weak Sterling/Euro exchange rate.
In the perfect world, living in a country that is not burying itself in oceans of debt, has a healthy economy and enjoys sustainable employment levels - is the utopian wish of all of in this part of the world - I am hoping and praying that Portugal will keep its economic 'head' above water in the years ahead.