The year 2008 brought an end to all property price bubbles. Dublin, London, the Spanish coastline or Florida, all property owners in these areas suffered severe loss in value of their properties and even worse, some had to realise this loss by selling the property to pay off mortgages.
The Algarve is no exception as long as we talk about the “second hand” market. Resale prices were and are dropping by 30% in comparison to January 2008. On the other hand we don’t see any decreasing prices when it comes to new built property. Developers for luxury real estate as E3 Properties, Vale do Lobo or Imocom as well as smaller developers offer their off-plan products at the same price as they were a year ago.
Actually, you will receive this price information:
Key Lago – Quinta do Lago AAAAAAAA Villa 606 m2
Key Lago – Quinta do Lago AAAAAAAA € 5.490.000,00
Key Lago – Quinta do Lago AAAAA Apartment 386 m2
Key Lago – Quinta do Lago AAAAAAAA € 2.710.000,00
Palácio da Quinta –Quinta do Lago AA Apartment 97m2
Palácio da Quinta –Quinta do Lago AAAA € 1.170.000,00
Vale do Lobo – Beach Club AAAAAAAA Villa 300m2
Vale do Lobo – Beach Club AAAAAAAA € 2.800.000,00
Vale do Lobo – Vale Sto. António AAAA Apartment 99 m2
Vale do Lobo – Vale Sto. António AAAA € 850.000,00
But why are these prices not following this trend? Why don’t we see any discounts like we see in Spain?
Yes, it is still a good and wise decision to invest in luxury property, but it must be to the right price. Are the above-mentioned prices of more than € 7.000,00 per square metre of construction right prices when it is possible to purchase resale property in the same area for less than € 6.000 per m2?
Of course, you have to check, what will be included in the purchase price. Rental guarantees, luxury furniture, up-to-date house electronics and highest standard building features as well as branding can increase the asking price. But are all these facts enough to explain the high difference in pricing?
The answer is: Be prepared to negotiate. Instruct your agent to achieve at least a 20% discount. The official asking prices cannot be lowered because all developers sold already units for these prices. These prices are part of calculations presented to shareholders and banks to secure the investment. These prices guarantee that you will achieve a nice profit, if you decide to sell the property in a few years.
