Since July it is close to impossible to rent a car in the Algarve. Press, media and others are celebrating this fact as the end of the crisis because it seems to be a signal of increasing tourism. I, personally, did not really want to comment this situation, but it seems to be necessary.
Let's go into the real figures. As reported on my twitter the hotel occupation in 2009 is down by more than 10%. Furthermore, bars and restaurants in the Albufeira area are suffering big losses in turn over, some reach 40%. Shops and stores, formerly very expensive, are standing empty. Just on the road between Faro and Almancil I count more than 20% of the shops with for rent/ for sale signs. This arrives at the conclusion that we have less tourists in the Algarve and these tourists are also spending less.
Why do we still have a lack in rental cars? The upshot can only be missing replacement of the sorted out older rental cars. I don't want to imply that the banks have once more the finger in the pie, but I cannot rule it out. Stricter credit conditions for the local rental car companies and cutting reinvestment by the fleet managers may have reduced the availability of rental cars.
Is the real estate market influenced by this? Real estate agents report that they have more to do now than in the beginning of the year. What a surprise! In the beginning of the year most of the agents were sitting in their offices, contacting prospects or simply playing on their computers. The summer in the Golden Triangle was always the time of sightseeing. Many tourists took, take and will take the chance to view villas and mansions they cannot afford now, comparable with sightseeing tours in Beverly Hills ("This is the house of Madonna and here lived Ayrton Senna"). Don't understand me wrong, the summer tourists are necessary for Quinta do Lago and Vale do Lobo, because they also create the desire to invest in this area and some of them bought years after their dream villa.
So, this argument is not valid. Less tourists, less turn over, less rental income for property owners and stricter credit conditions will keep the pressure on the prices. This is the GOOD news for all who are planning to purchase property in the area within the next 12 months. E.g. a few developers are prepared to offer up to 50% discount, of course only under the counter.
My advice for all who are planning to buy in the Algarve: Act like stock pickers; find the property you like, try to find out how long it is on the market and how often it already suffered price reductions. Ask your bank or independent brokers or surveyors for an evaluation and be prepared to offer not more than this.
Let's go into the real figures. As reported on my twitter the hotel occupation in 2009 is down by more than 10%. Furthermore, bars and restaurants in the Albufeira area are suffering big losses in turn over, some reach 40%. Shops and stores, formerly very expensive, are standing empty. Just on the road between Faro and Almancil I count more than 20% of the shops with for rent/ for sale signs. This arrives at the conclusion that we have less tourists in the Algarve and these tourists are also spending less.
Why do we still have a lack in rental cars? The upshot can only be missing replacement of the sorted out older rental cars. I don't want to imply that the banks have once more the finger in the pie, but I cannot rule it out. Stricter credit conditions for the local rental car companies and cutting reinvestment by the fleet managers may have reduced the availability of rental cars.
Is the real estate market influenced by this? Real estate agents report that they have more to do now than in the beginning of the year. What a surprise! In the beginning of the year most of the agents were sitting in their offices, contacting prospects or simply playing on their computers. The summer in the Golden Triangle was always the time of sightseeing. Many tourists took, take and will take the chance to view villas and mansions they cannot afford now, comparable with sightseeing tours in Beverly Hills ("This is the house of Madonna and here lived Ayrton Senna"). Don't understand me wrong, the summer tourists are necessary for Quinta do Lago and Vale do Lobo, because they also create the desire to invest in this area and some of them bought years after their dream villa.
So, this argument is not valid. Less tourists, less turn over, less rental income for property owners and stricter credit conditions will keep the pressure on the prices. This is the GOOD news for all who are planning to purchase property in the area within the next 12 months. E.g. a few developers are prepared to offer up to 50% discount, of course only under the counter.
My advice for all who are planning to buy in the Algarve: Act like stock pickers; find the property you like, try to find out how long it is on the market and how often it already suffered price reductions. Ask your bank or independent brokers or surveyors for an evaluation and be prepared to offer not more than this.
