One of Europe's most popular holiday destinations has seen prices sink lower and lower to the extent that it is now a buyers' market, with valuations only likely to go up in the future. Property in Portugal, and particularly the vacation area of the Algarve are now below estimates from banks in some places, and this has meant that foreign buyers could flock to the region throughout 2014 to grab themselves a bargain that would only rise in value as well as bringing them attractive rental income during peak seasons.
This is the claim from Channel 4's A Place In The Sun, which said that bank valuations for homes in the Algarve have continued to fall year after year since the financial downturn first took hold in 2008. It also added that prices are now following suit, taking the cost of buying to an almost all-time low in the Algarve.
Findings from property site Meravista found that the price of holiday homes across the Algarve region now sit at just €1,298 (£1,075), which is just five per cent higher than the valuations placed on them by banks in early estimates. However, in areas popular with holidaymakers in particular, such as Portmao and Olhao, the actual prices are even lower than the values seen elsewhere. It could see Portugal join neighbouring Spain as a country that will see a large influx of foreign investment across the next 12 months.
Investments here are set to be about more than just the holiday rental potential though, with capital gains set to become a reality in the not-too-distant future. Although prices are currently in the doldrums, they are expected to bottom out by the end of 2014, after which the Europe-wide financial recovery should have a positive effect on the market, pushing prices upwards again over the whole of 2015.
Anita van Huson, co-founder of Meravista, said: “ Algarve property was experiencing inflated growth in advance of the recession, so it was hit particularly hard when the markets crashed. I don’t think we’ll see valuations as low as these for a long time to come, which makes the Algarve an ideal place for property investment. As the area’s economy is starting to recover, now is the time for people thinking about making a life change or buying a retirement property to make the move. ”