Price decline slowing, sales rising – Portugal’s recovery gains momentum

Portugal’s property market is getting busier as the second quarter of 2014 gets underway, indicating the housing recovery is well underway, according to the latest RICS/Ci Portuguese Housing Market Survey (PHMS).

The February PHMS results highlight a continued increase in buyer interest which has led to a modest rise in sales. Lettings activity remained relatively steady, although respondents appear a little more optimistic regarding prospects for future volumes.

In the sales market, transaction levels picked up slightly on the back of the strong buyer interest reported last month. What’s more, new buyer enquiries continued to rise at a healthy pace throughout the February period. Buyers will be encouraged by the fact that house prices are still falling, although the pace of decline has slowed significantly. All things considered, the sales market appears to be in better shape than at any other point since the (PHMS) survey was launched in 2010.

In the lettings sector, tenant demand experienced a marginal uptick while landlord instructions fell for the fifth month in succession. Rents continue along their downward trajectory and are anticipated to fall further in the short term. However, the outlook for lettings activity turned more upbeat, with respondents expecting volumes to rise over the coming three months.

RICS Senior Economist, Josh Miller said: “The February results show improved buyer interest beginning to translate into greater transaction volumes, a trend which is projected to continue in the near term. This is slowing but has not yet arrested the decline in prices. Before we are in a position to talk about a genuine turnaround in the housing market the brighter macro news flow must be sustained.

Stand-up paddle boarding creating waves in the Algarve – another reason to own a home there!

The fastest growing water sport in the world, stand-up paddle boarding (SUP) is catching on in the Algarve, thanks to the region’s sandy beaches, clean water and consistent waves providing idea conditions for the sport.

Beaches up and down the Algarve are now offering the chance to rent a paddleboard for the day, or participate in tours along the coast, including inland along rivers in the western part of the Algarve. SUP is another fun family activity that owners of property in the Algarve can look forward to doing when they visit their villa or apartment in Portugal.

In fact, SUP has become so popular that between 15th and 20th April, a small group of stand-up paddle boarders will attempt the first marathon of its kind in the Algarve. The event is a gruelling marathon paddle across the southern Algarve from Sagres to Vila Real de Santo Antonio. The event is being organised by the Algarve Surf and Marine Activities Association (ASMAA), to raise awareness and money to help stop the ever growing problem of pollution in our oceans and along our shores.

SUP is the fastest growing water sport in the world. Originally it was created as an exclusive leisure activity for Hawaiian royalty, but in the last couple of years, SUP has enjoyed a resurgence world-wide and in Portugal is becoming a hot spot for the sport.

The beauty, purity and the challenge of this sport make it a wonderful platform to raise awareness about the extremely serious issue of ocean pollution. ASMAA hopes to make the SUP marathon an annual event that will serve as an on-going fundraiser for protecting our oceans.

A Valentine’s treat for UK buyers – Sterling at year high against euro

The £/€ exchange rate hasn’t so favourable to UK buyers in Portugal for over a year now, thanks to the interbank rate hitting £1/€1.22 on February 14th, the second time it has broken the €1.22 barrier in three weeks.

The last time £1 was worth €1.22 since the end of January 2014 was the second week of January 2013, after which it plummeted to lows of €1.14 in March and again in July, before gradually rising throughout the second half of 2013.

Sterling’s performance since the start of this year has been encouraging for UK buyers, with the rate spending the majority of the time above £1/€1.20. The bullish UK economy is expected to help Sterling maintain this level, with some analysts saying it will strengthen further.

Not only does property in Portugal get cheaper to British people as Sterling gains value against the euro, but it also brings down the cost of euro mortgage payments and running costs that come with a Portuguese home.

As an example, the Sterling price of a typical €400,000 townhouse in Vale do Lobo is currently £23,000 cheaper to a UK buyer than it was at the end of July last year, when the rate was £1/€1.14. Meanwhile, a typical monthly mortgage payment of €1,500 has come down to £1,230 from £1,316 for the same reason.

British people who need to send money to Portugal to purchase a property in the Algarve, or make regular payments between a UK Sterling bank account and euro account in Portugal are advised to use a FCA-authorised currency exchange specialist rather than asking their bank direct to make the transfers, as they receive a better exchange rate and more personal service.

Expats in Portugal urged to plan their finances and consider the exchange rate

British people planning to retire in Portugal in 2014 should be extra careful about how they use their pension, after a report last week has shown that annuities may not be good value for money.

Many British expats in the Algarve rely on regular income from an annuity after cashing in their pension pots, but unrealistic expectations about what today’s annuities deliver could lead to financial hardship once you’ve moved to Portugal.

The report by the Financial Services Consumer Panel highlighted how hefty fees charged by some annuity brokers can eat into a pension pot. For retirees living in Portugal, these effects can be compounded by a swing in exchange rates, when expats’ pounds buy them less euros. Portugal Property Sale recommends that British people planning a move to Portugal speak to a financial planner that specialises in helping expats.

Meanwhile, good news for anyone planning to purchase a property in Portugal in 2014 is the strengthening pound. As the year comes to an end, the pound is not far off levels last seen in January with £1 worth around €1.19 – compare this to the start of August when the rate had fallen to a dismal £1/€1.14. The effect of this is cheaper property for UK buyers. For example, a €219,000 apartment in the Algarve is around £8,000 cheaper than it was at the start of August, purely down to movement in the exchange rate.

Property buyers are advised to send payment to Portugal using a currency exchange specialist, they consistently offer better exchange rates than banks and can assist with making regular payments between the UK and Portugal, such as pensions.

Portugal’s population of mega wealthy on the rise – adding to the Algarve’s exclusivity

Portugal is becoming increasingly attractive to the world’s super rich, according to the recently published ‘Wealth-X and UBS World Ultra Wealth Report 2013’, which ranks the country 12th in Europe in terms of resident ultra high net worth (UHNW) individuals.

The Wealth-X report also shows that Portugal’s UHNW population – people with net assets of at least $30million – increased by 85 between 2012 and 2013, to 870 from 785. UHNW individuals in Portugal are now worth around $100billion in total, compared to $90billion a year ago. Germany ranks number one of the list, followed by the UK and Switzerland in third.

This is good news for the exclusive areas of Portugal’s Algarve, in particular the upmarket golf resorts of Vale do Lobo and Quinta da Lago, two of the most desirable place to own property in Portugal. Detached villas in prime spots in these resorts, with views over the fairway and ocean, typically start at €2-3million, reaching in excess of €10million. It is usual for wealthy international buyers to own property in Algarve hot spots through a company, thereby avoiding the hefty taxes that expensive property attracts when selling or passing on.

The world’s ultra wealthy population grew by more than six per cent between 2012 and 2013, reaching an all-time high of 199,235, with a combined fortune of nearly US$28 trillion. The Report identified more than 2,000 billionaires globally, who combined are worth $6.5trillion, equal to 23 per cent of the world’s UHNW total wealth. Year-on-year growth occurred mainly in North America and Europe, with the two regions responsible for a net gain of nearly 10,000 UHNW individuals and a total increase in wealth of $1.5trillion.

BBC ‘Dragon’ Duncan Bannatyne property-hunting in the Algarve

Scottish entrepreneur Duncan Bannatyne, one of the Dragons on the BBC show ‘Dragon’s Den’ is looking for a home in the Algarve, according to sources close to PortugalPropertySale.co.uk.

Bannatyne has been viewing luxury homes in the Vale do Lobo resort in the central Algarve, a hot spot with the international  jet set, thanks to its unspoilt beaches, world-class golf courses and balmy climate. Homeowners in the neighbouring resort of Quinta do Lago include English footballers Steven Gerrard and Michael Owen, while TV presenters Phillip Schofield and Judith Chalmers also have homes in the area.

Bannatyne used to own a villa in Mougins, a desirable village on the outskirts of Cannes on the French Riviera, until selling it last year on account of his divorce.

Typical of property that might suit Bannatyne are luxury villas around the famous Vale do Lobo golf course, which typically sell for around €3million and more. Properties there include large private pools and terraces offering sea and fairway views. Villas there rent for around €3,500 to €7,000 a week during peak season.

Bannatyne has recently published the second volume of his memoirs called ‘Riding the Storm’, the follow-up to his bestselling ‘Anyone Can Do It’. The BBC describe it as “an inspirational account of how Duncan survived personal and professional setbacks, including the break-up of his second marriage and the recession”.