Property Price Woes

[Geriatric]

As in Uk owner would be liable for any shortfall in salling price to balance owned on the mortgage. Portuguese Bank could attach any assets owned including in UK but costlly for the Bank to pursue in UK unless prospect of a return .

[cereza]

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?

The banks don't want to show the real value of any property assets on their books as it would make their balance sheets look awful so where possible they will try to keep you in the property. I've heard of cases where they allowed the owner to stay in place paying whatever they could afford which is far lower than the agreed mortgage payments.
If you want to buy any property now then it's best to see what the banks have to offer first.
As for walking away from a mortgage whether you do that or are repossessed the bank will try to recoup any loss.

[widge]

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?

Strange question to ask now, maybe this hypothetical person and anonymous bank should have thought about this before they did business with each other !

[sunman]

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?

The banks don't want to show the real value of any property assets on their books as it would make their balance sheets look awful so where possible they will try to keep you in the property. I've heard of cases where they allowed the owner to stay in place paying whatever they could afford which is far lower than the agreed mortgage payments.
If you want to buy any property now then it's best to see what the banks have to offer first.
As for walking away from a mortgage whether you do that or are repossessed the bank will try to recoup any loss.

I don't know about Portugal but in England if you write to tell your mortgage Bank that you can't afford the payments they are obliged to ask you what you can afford and actually pretty well have to accept it. They threaten you with all sorts but if and when you get to court, if you can provide evidence that you gave the bank fair warning & can show that you are being reasonable in your offer the judge normally finds in the homeowners favour, it's frowned upon for banks to be seen as making people homeless.

[HampshireRich]

Excuse me for being naive here, but what are you lot pontificating on about? This is no different to people who bought properties in the UK some years ago and now find they are in negative equity? So what? - only an issue if you want to sell. So don't try to sell until the market recovers. If you bought your place in the sun as an investment, tough luck - you will have to wait!

[pato]

Excuse me for being naive here, but what are you lot pontificating on about? This is no different to people who bought properties in the UK some years ago and now find they are in negative equity? So what? - only an issue if you want to sell. So don't try to sell until the market recovers. If you bought your place in the sun as an investment, tough luck - you will have to wait!

You can't take it with you anyway.

[Aldo]

Couldn't agree more!!

In my opinion, I know some will disagree...

You only make a loss if you crystallise it by selling in a depressed market. My builder has developed 3 or 4plots of land for substantial villas over the past 2 yrs and continues to do so, the prices vary between £500k and £1m, and these have sold within months. So it can't be so bad. Unfortunately, some vendors as still asking unrealistic prices harking back to prices at the top of the market which is why properties don't sell. They are not market value. The same happens in the UK, people want to sell high and buy low. As me ruined above, there are also distressed sales by people who unfortunately have been unlucky, and because they need to offload quickly this reduces prices and impacts on the perception of a downward spiral. We also have buyers who come over making silly offers and as the agents need sales, they try and pressurise the desperate vendor into accepting, which does not help.

The UK prices are starting to recover and Europe is more settled. It will not be instant but prices in the Algarve will level and start to increase over time.

Most of us have bought our places as a lifestyle investment and I can tell you, mine works better than Valium !!

As soon as I get to CVO, my stresses of work disappear. That's worth it's weight in gold.
Roll on Sept when I arrive for 3 weeks

[pointersister]

You are 100% correct Aldo Wise words and we love our wee bolt hole In Cvo too. Great escape from everyday stresses will be there on Wednesday yippee

[cereza]

If you are fortunate enough to be smug or apathetic enough to be naive then this topic is not for you but for many people the woes of the property market in the Algarve have been and will continue to be of major concern. Hopefully discussing the situation can be helpful to those who have decisions to make one way or the other

[widge]

Portugal property prices rise
Thursday 15th August 2013

The average monthly bank evaluation of property in Portugal increased by 1.8% or €18sqm (£15) to stand at €1,014sqm (£864sqm) at the end of June, according to the latest data from the National Institute of Statistics.

Despite the price rise in June, overall values fell by 2.4% year-on-year, with experts anticipating further declines, as a consequence of the country’s flagging economy, a lack of mortgages and high unemployment.

Property price growth in June was led by the metropolitan areas of Lisbon, up 2.5% month-on-month. But that still left values down by 3.2% on an annual basis.

While Madeira stood out as the only region reporting a decline in June, the Algarve recorded the largest annual decline in values, with the average price per square metre declining by €72 (£61) or 5.5%, just ahead of the Azores that saw prices fall by an average of 4.8%.

As one of the most popular places to acquire a holiday home in Europe, the annual price decline in real estate values will please many of those people active looking to buy property in Portugal.

- See more at: http://www.propertyoverseastoday.com/ne ... QqUtp.dpuf

[EMM]

We met with our architect on friday, he is busier now than at any time n the last 3 years.
He is working on individual properties rather than developments.
Also many owners are getting their paper work up to date as the Financas and Camaras are slowly catching up with outstanding issues.

[Polli62]

Not many developments to work on at the moment though is there. Busy on individual properties maybe due to some property owners trying to legalise their illegalities so they can sell if need be besides the Financas/Camara catching up with them for outstanding issues.

[widge]

The plot next to me was on the market from 2003 until 2011 without a buyer. In 2011 a local property developer exchanged a ready built property in Presa de Moura for the plot & cash. The plot became a "Project" a 3 bed 3 bath villa with pool was marketed at €695,000 !! He put in the foundations for the new build next to me in January 2012 & stopped work after 6 weeks.Nothing has happened since and the foundations & concrete slab have disappeared into the undergrowth which has restored the plot to scrubland.

Without a guaranteed sale the developer doesn't have the free cash to build the villa & wait for a buyer at an unknown price, I doubt that there are any speculative build projects underway in the present market & as previously mentioned restorative work & pre sold custom builds are the main source of work for the beleaguered developers.

[Bruce Wallis]

The plot next to me was on the market from 2003 until 2011 without a buyer. In 2011 a local property developer exchanged a ready built property in Presa de Moura for the plot & cash. The plot became a "Project" a 3 bed 3 bath villa with pool was marketed at €695,000 !! He put in the foundations for the new build next to me in January 2012 & stopped work after 6 weeks.Nothing has happened since and the foundations & concrete slab have disappeared into the undergrowth which has restored the plot to scrubland.

Without a guaranteed sale the developer doesn't have the free cash to build the villa & wait for a buyer at an unknown price, I doubt that there are any speculative build projects underway in the present market & as previously mentioned restorative work & pre sold custom builds are the main source of work for the beleaguered developers.

There is a silver lining to every cloud....in this case Widges view

[widge]

The plot next to me was on the market from 2003 until 2011 without a buyer. In 2011 a local property developer exchanged a ready built property in Presa de Moura for the plot & cash. The plot became a "Project" a 3 bed 3 bath villa with pool was marketed at €695,000 !! He put in the foundations for the new build next to me in January 2012 & stopped work after 6 weeks.Nothing has happened since and the foundations & concrete slab have disappeared into the undergrowth which has restored the plot to scrubland.

Without a guaranteed sale the developer doesn't have the free cash to build the villa & wait for a buyer at an unknown price, I doubt that there are any speculative build projects underway in the present market & as previously mentioned restorative work & pre sold custom builds are the main source of work for the beleaguered developers.

There is a silver lining to every cloud....in this case Widges view

Indeed Bruce, as in vista rather than state of mind