An old investment adage goes: the higher the risk, the higher the return. It is for this reason that an article on profiting from the recession in The Times Business and Money section begins with a quote from a member of the Rothschild family, delivered to a real estate client following the Franco-Prussian war: "buy when blood is running in the streets". There are many reasons why villas for sale in the Algarve offer a lucrative investment opportunity. Here are the best ones. |
The Algarve remains one of Europe's most popular holiday destinations, frequented by lovers of fine cuisine, pristine beaches and stunning golf courses. With the best weather in Portugal, and some of its most breathtaking scenery, nothing short of a natural disaster could truly diminish its pulling power. The Algarve is the most significant of Portugal's three key housing markets, with 90% of all foreign buyers settling on properties in this region.
While the Portuguese housing market has continued to slide, with the average property price dropping by 8.9% to €1,047 per sq m in 2012, a newspaper report by Sol found that the luxury property market has remained stable and may have even been helped by the economic downturn.
Portugal's already small construction industry meant that new builds were often unique and diverse in style, and the recession has meant that the lack of newer buildings has maintained the demand for the old. Even as property prices have fallen and repossessions have taken place amid the closure of several estate agents, banks have been selling repossessed properties directly, often with very attractive financial options tailored to foreign investors.
As Donald Trump famously said, "It's not about buying the best property, it's about getting the best deal", and during a recession everything is on sale. Housing prices rose by 20% following the recessions of 1973-75 and 1981-82, and Time predicts that a rapid increase in prices is set to occur over the next decade. With a stable market for luxury properties, investing here could even be more secure than investing with one of the many European banks whose futures look less certain.
When investing in a property, it is wise to consider factors other than the initial cost of the property. Portugal is a country that has undergone rapid development since its inclusion in the EU in 1986, with billions of Euros of European Development funds invested in it. As Britain's oldest ally and the site of near unparalleled development, with well run, well maintained resorts by the dozen, excellent amenities and a rock solid reputation as a tourist destination, you are buying into one of Europe's most important socio-economic investments. Despite the recession, the economy is one of the fastest growing in Europe.
The Algarve is the jewel of the Portuguese property market, and with the free movement of capital initiated in the 1990s there are no longer any restrictions on buying property as a non-resident, even if you come from outside of the EU member states. The mortgage market is well established and competitive, and property rights are secured under Article 62 of the constitution.
This is a golden opportunity to carve a diamond from the rough. Simon helps create content for the Property Sales Algarve website. Visit http://www.propertysalesalgarve.com to see hundreds of villas for sale in the Algarve from townhouses to superbly appointed elegant 6 bed properties.
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