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East Algarve property market getting back up
Proluna Real estate is an established licensed real estate agent with 5 years of experience in the property market in the East Algarve. In the following article they give their views on the current property market in the East Algarve, being the areas of Tavira, Cabanas, manta rota, Altura and Praia Verde. The property market in the East Algarve and especially around Manta Rota And Altura was booming up till novermber 2007. The construction could not keep up with demand. Especially in Manta rota where the very popular townhouses were built, sales were amazing.
In these days 90% of all properties were sold off plan already for great prices. The result was many areas which were not interesting to develop because of the prices of the plot now became interesting.
This in combination with easy financing taking lower profit margin but sell a lot was the way to keep up with demand. This of course was the case in Manta Rota but also in Altura.
In the area of Cabanas and Tavira it were more apartments being built. In these areas large areas where developed with the same business philosophy aimed at the foreign market.
Luckily for the area, the quality was always good and developers aimed for the middle an high end market building nice projects of good quality and with a good atmosphere. So the result is that the area of cabanas has had a major growth over that period with nice not to high-rise apartments. Also these were sold off plan very easily. It was in these days as an estate agent you sold several a week and often more than one to one client. But that were the good old days.
Property market east Algarve slows down.
Staring November 2007 sales started to decrease. In the beginning slowly but it went real quiet by spring 2008. It went so quiet that people not even enquired over the internet, let alone viewings. The result is plenty of local real estate agents got in trouble. When not selling property and having known only the good times they did not have the proper financial back up to keep going. Many of them closed.
Property market in Manta Rota and Altura.
As descried before in the good times production could not keep up with demand. So when market slowed down this came more in balance however especially in these areas there are many small developers active doing small projects. As a result they are very flexible and could easily stop production of new units. So especially in these areas you don’t see a massive overproduction of properties. No overproduction so no need for dumping properties to generate income. So definitely no Spanish sale offs here. Of course the prices went down. To be precise, the prices did not get down but had become negotiable. This was not the case in the past since there were so many buyers around. In general we can say price dropped by 5-7%. This is for new built, and in general.
Of course during the last 2 years also builders came in to trouble and had to sell off. So yes there were some cherries to be picked but no massive collapse of the market. Which is of course is very good. Re-sale wise it has been difficult to get a good return on your investment since the prices did not raise. Many property owners now use Holiday rentals to get their return. The conclusion is that yes the market has gone down by 5-7% but no collapse at all. Is a good time for cherry picking since there are some property owners who have to sell still around, but limited.
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