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Property Price Woes
Re: Property Price Woes
picking through the bones of this Cereza,cereza wrote:The situation in the Algarve property market is that there are far more sellers than buyers so prices won't be going up for a long time.
If you bought more than 10 years ago you may still be able to get out with a profit but if you are financially secure and want to keep your property then you have no worries - just keep it and enjoy it regardless of the potential loss. The banks hold a lot of repossessed properties which they don't want to show on their books at market value but which they are desperate to sell. As for the Portuguese economy there is a long long way to go before there is any light in the tunnel and I know of many villas owned by people in the North of the country which are on the market or have been repossessed. Sadly anyone who bought in the last 10 years and wants to sell now is in trouble and will suffer losses even if they can find a buyer at all. The UK market has been boosted by government initiatives which will not help overseas purchases and also by speculative buying as protection against expected inflation due to QE - these specs have no interest in buying holiday homes !!! I sold my villa 1 year ago after a long time and the price I took seemed very low but it doesn't seem so bad now and I am so pleased to be out. I have still holidayed in CVO since then and to be honest it was so nice going out without any of the worries of a 2nd house. i will continue to holiday in CVO but just as a renter which I think will prove far cheaper in the short and medium term than being an owner.
- I've owned my villa longer than 10 years so I'm onside re value, hurrah
- last time I checked I'm just about financially secure, hurrah
- on a level playing field I'd like to sell my villa, but there's no buyers out there, boo!
- I still holiday in CVO too, but have to stay in my villa & worry about it, boo!
- but I'm offering great rates to friends & family so I might get you as a customer, hurrah
seems to me that I', 3-2 up, so life is cool
Re: Property Price Woes
This analysis supports cereza's view about prices peaking in 2003/04 & then continuing to decline to the present day. It could have been much worse if Portugal had shared the housing boom that Ireland, for example, experienced where house prices have halved from their peak in some areas. For Brits the exchange rates have proven favourable, for those buying in 2004 when a £ bought you €1.55 before declining to the €1.16 we see today.
Q2 2013 was the 11th consecutive quarter of y-o-y house price declines. In Q2 2013 house prices in AM Lisboa and the Algarve were down by 22.6% and 22.5%, respectively, below the peak level.
The most expensive housing in Portugal is in Grande Lisboa, with an average price of € 1,251 per sq. m., and the Algarve with €1,222 per sq. m.
The house price boom that swept through most of Europe and the developed world from the mid-1990s to 2006 missed Portugal. Except in 2003, house price growth in Portugal has been generally lacklustre.
2003 - 2004, house prices rose by an average of 6.2% y-o-y (3.3% in real terms);
2005 - 2007, prices rose by an average of 1.25% (-1.3% in real terms);
2008 , prices fell by an average of 4.7% (-7.1% in real terms);
2009, prices fell by an average of 2.6% (-1.8% in real terms);
2010 - 2012, house prices fell by an average of 3.1% (-5.5% in real terms)
Why did Portugal miss the boom? Partly because it experienced sluggish economic growth, with a contraction of 0.8% in 2003, and average of 1.1% GDP growth from 2004 to 2008. In 2009, the economy contracted by 2.9%. Although the economy managed to temporarily recover, growing by 1.9% in 2010, Portugal’s GDP went down again in 2011 (-1.6%) and 2012 (-3.2%).
Q2 2013 was the 11th consecutive quarter of y-o-y house price declines. In Q2 2013 house prices in AM Lisboa and the Algarve were down by 22.6% and 22.5%, respectively, below the peak level.
The most expensive housing in Portugal is in Grande Lisboa, with an average price of € 1,251 per sq. m., and the Algarve with €1,222 per sq. m.
The house price boom that swept through most of Europe and the developed world from the mid-1990s to 2006 missed Portugal. Except in 2003, house price growth in Portugal has been generally lacklustre.
2003 - 2004, house prices rose by an average of 6.2% y-o-y (3.3% in real terms);
2005 - 2007, prices rose by an average of 1.25% (-1.3% in real terms);
2008 , prices fell by an average of 4.7% (-7.1% in real terms);
2009, prices fell by an average of 2.6% (-1.8% in real terms);
2010 - 2012, house prices fell by an average of 3.1% (-5.5% in real terms)
Why did Portugal miss the boom? Partly because it experienced sluggish economic growth, with a contraction of 0.8% in 2003, and average of 1.1% GDP growth from 2004 to 2008. In 2009, the economy contracted by 2.9%. Although the economy managed to temporarily recover, growing by 1.9% in 2010, Portugal’s GDP went down again in 2011 (-1.6%) and 2012 (-3.2%).
Re: Property Price Woes
Widge , we know people who bought in 2004/5 sold in 2007/8 and got up t0 20% more than they paid.
Apartments bought for 170k sold for over 200k.
They were the clever ones.
Portugal/ the Algarve did have its property price surge that is one of the reasons why so many bought in that period hoping that it would continue.
Apartments bought for 170k sold for over 200k.
They were the clever ones.
Portugal/ the Algarve did have its property price surge that is one of the reasons why so many bought in that period hoping that it would continue.
Re: Property Price Woes
I sourced my information from The Instituto Nacional de Estatistica (INE). They may have a slightly broader & more accurate database on which to base their statistical analysis. On the other hand I'm sure your first hand knowledge & experience is wholly representative of the Algarve in its totality !EMM wrote:Widge , we know people who bought in 2004/5 sold in 2007/8 and got up t0 20% more than they paid.
Apartments bought for 170k sold for over 200k.
They were the clever ones.
Portugal/ the Algarve did have its property price surge that is one of the reasons why so many bought in that period hoping that it would continue.
As for being clever that rather depends upon what you set out to achieve in the first place, Selling a property in 36 months for €30k profit hardly covers the cost of buying, selling, furnishing, removals and legal fees not to mention the capital gains tax!
Re: Property Price Woes
Ireland just bottoming out now, trawling the bottom for past few months and just maybe a small increase in urban areas. I agree with Widge 50% reduction pretty much standard.widge wrote:This analysis supports cereza's view about prices peaking in 2003/04 & then continuing to decline to the present day. It could have been much worse if Portugal had shared the housing boom that Ireland, for example, experienced where house prices have halved from their peak in some areas. For Brits the exchange rates have proven favourable, for those buying in 2004 when a £ bought you €1.55 before declining to the €1.16 we see today.......
Apt for sale in block adjacent to ours in Cvo. This block of six apts are approx 5 years older than ours, layout the same but a different style kitchen. The seller is Portuguese and the auctioneers appear to be aiming at the Portuguese market. The development as a whole would have more Portuguse than Uk and Irish. His asking price is €165,000. His asking price is approx 28% more than we paid new in 2009. I hope he does achieve his asking price.
http://casas.pai.pt/imoveis/apartamento ... -o/981711/
Last edited by joeysoap on Fri Aug 23, 2013 12:18 am, edited 2 times in total.
Re: Property Price Woes
Widge it is a hell of a lot better than selling it for a 30k loss which would probably be todays price.
Also they got 3-4 years of very good rental incomes, unlike todays.
They also got the sterling advantage due to its decline against the euro from buying to selling.
This was one of the succesfull sales techniques used by the likes of MRI and their ilke to tempt buyers into the market.
Of course as we all know it all came to a sudden end with the banking crisis.
Also they got 3-4 years of very good rental incomes, unlike todays.
They also got the sterling advantage due to its decline against the euro from buying to selling.
This was one of the succesfull sales techniques used by the likes of MRI and their ilke to tempt buyers into the market.
Of course as we all know it all came to a sudden end with the banking crisis.
Re: Property Price Woes
Joey I know this apartment and the owner is a friend. It is far from out of date, has only had limited rental use, very nice indeed has a huge roof terrace with great views across carvoeiro. That is what he took us to see.
It is one of the later Monte Dourado properties and does not compare with those lower down which are more in line with your description.
It is with at least two agencies and has had a few viewings already this summer. Like many Portuguese owners he is in no rush to sell unless the right offer comes along.
It is one of the later Monte Dourado properties and does not compare with those lower down which are more in line with your description.
It is with at least two agencies and has had a few viewings already this summer. Like many Portuguese owners he is in no rush to sell unless the right offer comes along.
Re: Property Price Woes
EMM, 
did not mean to imply it was out of date, far from it, it is a super modern apartment. Apologies for misunderstanding. I was just trying to say that property prices have not fallen by all that much since we purchased, and in our case possibly increased. I sincerely hopes he achieves his asking price. The views are as you state, outstanding and the owner is a nice person.
did not mean to imply it was out of date, far from it, it is a super modern apartment. Apologies for misunderstanding. I was just trying to say that property prices have not fallen by all that much since we purchased, and in our case possibly increased. I sincerely hopes he achieves his asking price. The views are as you state, outstanding and the owner is a nice person.
Last edited by joeysoap on Tue Aug 20, 2013 11:42 pm, edited 1 time in total.
Re: Property Price Woes
You're describing a boom & bust scenario with 25% + swings up & down between 2005 & 2013. I must have missed it as did the Portuguese government!EMM wrote:Widge it is a hell of a lot better than selling it for a 30k loss which would probably be todays price.
Re: Property Price Woes
I haven;t studied any reports but I would say from my own experience and other anecdotal evidence that Algarve prices peaked in early 2007 with the start of the decline coming in the August with the run on Northern Rock which was the first sign of the financial crisis.
If you bought in Euros but covered the foreign exchange with Sterling in the 1-50 area then any losses have been off-set by the consequent fall in the Pound but there are many people who took out Euro mortgages with no cover as the Euro mortgages were at a more attractive interest rate - these people have suffered badly.
As discussed many times before current asking prices bear no relation to the real market - if you really want to sell then you have to be realistic - price the property competitively and still be prepared for low bids.
If you bought in Euros but covered the foreign exchange with Sterling in the 1-50 area then any losses have been off-set by the consequent fall in the Pound but there are many people who took out Euro mortgages with no cover as the Euro mortgages were at a more attractive interest rate - these people have suffered badly.
As discussed many times before current asking prices bear no relation to the real market - if you really want to sell then you have to be realistic - price the property competitively and still be prepared for low bids.
Re: Property Price Woes
Sounds good Sunman - I'll be in touchsunman wrote: I'm offering great rates to friends & family so I might get you as a customer, hurrah
seems to me that I', 3-2 up, so life is cool
Re: Property Price Woes
That original post just comes across as someone who's bitter because they want to buy but can't.
Its ridiculous to suggest 10% is available as risk free investments. That is simply not even close to being correct. So anything else that is based off of that calculation is nothing more than fantasy.
Its also ridiculous to say that prices need to fall into line with Portuguese wages. Both of these points are just the original poster displaying an amazing lack of financial sense.
If you pick some town 100km inland then yes local wages will end up being the primary factor.... choose a holiday resort town on the south coast and what Portuguese people earn is completely irrelevant. The only way Portuguese people will be in these houses or apartments is when Jorge is fixing the leaking tap or when Ana is changing the sheets for their new British owners. Or if they end up Portuguese owned they'll be by wealthy Lisbon residents buying a weekend place. And if someone is buying a second home I don't think they'd even be able to tell you what the average wage is, never mind be earning close to it themselves.
I'd love the prices to crash more than anyone as I'd be happy to buy if it happened. But that post was just full of absolute nonsense
Its ridiculous to suggest 10% is available as risk free investments. That is simply not even close to being correct. So anything else that is based off of that calculation is nothing more than fantasy.
Its also ridiculous to say that prices need to fall into line with Portuguese wages. Both of these points are just the original poster displaying an amazing lack of financial sense.
If you pick some town 100km inland then yes local wages will end up being the primary factor.... choose a holiday resort town on the south coast and what Portuguese people earn is completely irrelevant. The only way Portuguese people will be in these houses or apartments is when Jorge is fixing the leaking tap or when Ana is changing the sheets for their new British owners. Or if they end up Portuguese owned they'll be by wealthy Lisbon residents buying a weekend place. And if someone is buying a second home I don't think they'd even be able to tell you what the average wage is, never mind be earning close to it themselves.
I'd love the prices to crash more than anyone as I'd be happy to buy if it happened. But that post was just full of absolute nonsense
Re: Property Price Woes
At last some common sense! Good posting Octopus.
Re: Property Price Woes
At the end of the day a property is worth what someone will pay for it. Location is the key. You can always change a property, but not its location.
Property prices today seem to be guess work. We spoke to 3 agents this year to get valuations and advice to make an informed decision as to possible sale. 3 different valuations, 3 different lots of advice. All the valuations seemed low.
The T1 previously mentioned above is near us offered at 165k. One agent has an T2 apartment on the same complex as the T1 for 185k, and they advised marketing our property at 250K.
Our property does need some updating, which we have started. It is a 2 bedroom/2 bathroom apartment with balcony (sea views), carport, courtyard and laundry room. Plus we own an adjoining plot with two annexes (poolside lounge/bedroom with wetroom and a self contained studio villa), a heated private pool with terrace (limited sea views), sauna, BBQ terrace with built in table and benches (sea views). The studio villa and a large upper terrace both have glorious views of the sea and village centre. It is close to the centre, but in a quiet lane. It has the location and there is nothing else like it in the area. It is a unique property, so I appreciate comparison pricing is difficult, but the 250k does not make sense.
It is a typical portuguese style. Another agent valued it at 300k and suggested we make it American style, but then it would lose its character. They also suggested knocking down a wall. It would make the room an odd shape. This wall is about 1ft thick and has 2 apartments above it and - so I don't think so!
Property prices today seem to be guess work. We spoke to 3 agents this year to get valuations and advice to make an informed decision as to possible sale. 3 different valuations, 3 different lots of advice. All the valuations seemed low.
The T1 previously mentioned above is near us offered at 165k. One agent has an T2 apartment on the same complex as the T1 for 185k, and they advised marketing our property at 250K.
Our property does need some updating, which we have started. It is a 2 bedroom/2 bathroom apartment with balcony (sea views), carport, courtyard and laundry room. Plus we own an adjoining plot with two annexes (poolside lounge/bedroom with wetroom and a self contained studio villa), a heated private pool with terrace (limited sea views), sauna, BBQ terrace with built in table and benches (sea views). The studio villa and a large upper terrace both have glorious views of the sea and village centre. It is close to the centre, but in a quiet lane. It has the location and there is nothing else like it in the area. It is a unique property, so I appreciate comparison pricing is difficult, but the 250k does not make sense.
It is a typical portuguese style. Another agent valued it at 300k and suggested we make it American style, but then it would lose its character. They also suggested knocking down a wall. It would make the room an odd shape. This wall is about 1ft thick and has 2 apartments above it and - so I don't think so!
Re: Property Price Woes
What would the consequences be if someone paid 300.000 euros for apartment,mortgage owed 200.000,now valued 150.000! I know if you loved the place and could afford it, you hope things pick up eventually but anyone having to sell could they just walk away and leave it to Portuguese bank .Probably too simple eh? You'd obviously loose your 100k down payment but what else?