Despite many ups and downs during the last years, we can feel it: The market is consolidating. The slow but steady recovery gives it the strength to grow in a healthy way.
It was in 2008 when the worldwide crisis brought a sudden halt to sales also in the Algarve, yet the real bottom of the collapse in the property market was reached in 2012. In 2013 nobody believed the market would ever come back to the Algarve as strong as in the „golden years” around the turn of the millennium.
Yet, slowly vendors understood that they had to swallow the frog and come down in their asking price to be able to sell. So slowly the property market has begun to climb out of its hole in 2014. This was the year when the French discovered the Algarve as a tax heaven saving them from their political situation at home. And the NHR system
installed by the Portuguese government started to bring fruit.By 2017 prices started to tighten and it became almost impossible to buy a reasonably located and well-built property for between 400.000 € and 500.000 €.
Since real estate has finally started to bounce back across the Algarve, the banks have answered with accessible mortgage rates. Finally, homeowners who wish to sell their houses rest assured that a sale for a reasonable price is feasible.
According to Diário de Notícias, prices rose as high as 25% in terms of property sales in 2016. The newspaper writes also that an increasing number of foreigners, particularly French nationals, were property investors registered in 2017. This is being backed by APEMIP, the Association of Estate Agents in Portugal, which announced that one in four homes sold 2017 in Portugal were sold to foreigners (report in of 04/01/2018).
Property prices in Portugal are expected to grow at an average annual rate of 6% in the next five years. The trend is apparently ‘here to stay’ and is largely explained by “too much demand and not enough supply”. The forecast is made in the 2017 November edition of the Portuguese Housing Market Survey (PHMS), carried out every month by RICS (Royal Institute of Chartered Surveyors) and Confidencial Imobiliário (CI) magazine. Data from the PHMS show that the real estate sector continues to report an increase in demand from buyers, though not as significant as before. Sales are on the rise, but the number of new properties on the market is falling.
We don’t have a crystal bowl to foresee the future of the market, but economists agree that the Algarve real estate market is dependant on the worldwide economic and political development. So we may state that 2018 is going to be a restorative year as the market is progressively improving.