The search for luxury real estate in the West of the Algarve has been growing in recent years but the construction during the crisis, reflected now with lack of supply. The solution has been to rehab.
According to the first study about the housing market in the West of the Algarve, also known as western Algarve, carried out by Engel & Völkers and ImoEconometrics (E & V) of Lakes, German mediator of luxury real estate, despite the increase in the sale of houses, especially for second homes in the past two years, the number of transactions is still inferior to the period before the ' crisis ' and the main reason for this , is the lack of supply of new construction.
In 2016 were built from scratch just 130 houses in the West of the Algarve and even the volume of new projects of second homes in pipeline, is low in historical terms, in relation to the demand. Not even the offer of a few projects under construction will remedy the shortage of supply.
There is still demand for housing went up 74% in 2016, for 2012 (peak of the crisis), however, the real growth direction by market makers have been even greater than this value. As the economic crisis caused a near stop residential sector and demand increased, it was necessary to quickly find a solution and rehabilitation was the solution. Sandra Matos, Director of E & V of Lakes, admits in an article published in the Economic Journal in the next two years must be not major changes in the provision of residential projects of second homes in Windward, "what we see is the increase in the market prices of the properties used. In a good location the property has used it, in the current context, a value very close to the market again. The great engine of real estate market in this scenario has been the emphasis on rehabilitation ".
The increase in demand has been boosted by foreign interest – even though it was always one of the potential buyers of real estate in Algarve, has grown in recent years. The study reveals that the 529 million euros of sales volume of housing in 2016 in the Windward, 33% of foreign investment. Customers are mainly from Northern Europe, especially Germany, Sweden and the Netherlands. The charge is the point that most customers don't buy a second housing more than 4 hours flight from your country of origin. "With the reduction of restrictions on credit already showing also a recovery on the part of the national market," admits also the Director of the V & E of Lakes.
What are you looking for?
The analysis of the market indicates that the demand is very varied and those seeking a holiday home prefer villas with private pool and value privacy, sea view, or golf in order to enjoy in full the lifestyle that the climate of the region offers.
Already those looking for a property for investment demand the spots more and prefers the apartments or villas in resorts or condominiums with private pool and property management services. The goal is to have at the same time a holiday home and an immediate income. T2 to T3 typologies are the most sought after for this type of client. Already retired customers enjoy being near the town and seek comfort and safety, sun exposure and the terraces are very important as well as the proximity of services such as supermarkets or pharmacies and prefer apartments to villas.
3000 real estate on the market to offer the Windward
Beginning in 2017, there were around 3000 real estate on the market to offer the Windward, and the municipalities of Lagoa, Portimão and Lagos are concentrated almost 86% of the offer, while only 1% of Monchique second homes for sale. The offer in the context of resort is also not very expressive in the region, representing just 23% of the total supply of second homes and with new product is even more reduced.
Prices also have direct implications on the demand growth. Although there is an increase in prices, are still below the period of crisis. In the municipality of Portimão, prices began to recover at the end of 2014, according to the study, having recovered more than 13%, after a nominal descent of 22% during the crisis. The average prices of second homes in Windward is located between 2,100 and 2,500 euros the square meter. Lakes and Lagoon are the counties where there are higher average prices.
The fact that the Algarve arouse more and more international interest also stems from the increase in demand, with the advantage of having more desirable prices than other parts of Europe. The Algarve is a destination very consolidated and recognized internationally. In 2016, Portugal was once again elected as the best beach destination and golf in Europe and the Algarve the best place in the world to live. The prestigious Forbes magazine, in your ranking ' the best countries to invest in 2017 ' placed right above Germany Portugal and United States.