As property agents, we are particularly lucky as we are part of Savills.
Savills is the largest global property player in terms of residential property and we benefit greatly from being part of this network of over 600 offices as it affords us an invaluable global perspective on our industry and this is so important, as our property market does heavily rely on foreign investment and especially so at the top of the market on which we have focused our efforts for over 20 years.
There have been a couple of glitches in our market over the past 20+ years. 9/11 and the financial crises of 2008 were both significant and made many of us sit up and hold our breath. However, business never came to a standstill for us at QP. Prices may have dropped slightly and recovered slowly but, as usual in the property market, it’s not for those who are in it for the short term and all that is now long forgotten.
This pandemic has been entirely different. On Friday the 13th March our business came to a halt. 50% of our agreed sales cancelled or were put on hold and no new sales were agreed for over 2.5 months. A trying time for all of us on so many levels. Personal, professional and for many of us, for the first time, we were actually afraid for our own and the lives of our families and friends.
A testament to our species and our ability to adapt, come June the 1st, and the end of lockdown, life desperately wanted to return to normal. And so it did. With one unexpected difference. People did not just come out of lockdown, they stormed out and to us, it seemed like people had been given a new lease of life and were anxious to make the most of it.
Over the past 3 months, our 4 offices have sold over EUR 100m worth of properties in the central Algarve. Never have sales been so good. Not only is the volume up, but prices are on the rise too. Our average sale price over the past 3 years has hovered between EUR 1.6m and 1.8m. Currently, it is up at just over EUR 2.1m. Speaking with colleagues, many agree, the market is buoyant and the amount of property for sale is dwindling. More and more people can travel again and as if there was a need for more good news, banks are keen to lend money and the conditions to borrow have never been better.
The property market in the Algarve has gone from strength to strength. Over the past three years, QP Savills have sold a number of large properties in the Quinta do Lago and Vale do Lobo area for over Euro 18,000 per square metre. This is an important milestone for the country’s property market and represents values not seen before nationally. Price tags of over Euro 10 million are now more and more common, with standards of construction and design able to compete with the best in the world.
Portugal and the Algarve have had so much good press over the past few years and even during this pandemic. In 2019 Portugal was voted Best Place to Retire, Best European Destination, received countless golf awards and was voted 3rd safest country in the world! Golden Visas, tax benefits for non-habitual residents, safety, sunshine, etc., have all contributed to its allure. The fact that the Algarve has been largely uninfected by COVID 19 in the Algarve, has certainly added to making it a very attractive proposition for many.
And we can see this clearly in the increased amount of interest we have received since March 2020. Not only is this bringing new buyers into the property market, but it is also motivating people to change the homes they already have on the coast. With intentions of spending more time in the Algarve, people are up-sizing to bigger and more comfortable properties or moving to a better location and all this has stimulated the market enormously.
Also as banks continue to accumulate debt, many of our clients have told us that they would rather keep more of their assets in the form of property than have cash in the bank.
This is all further demonstrated in the size, quality and style of properties being developed in the area. And we are not just talking about properties within the Quinta do Lago and Vale do Lobo areas but across the coast. Over recent years, some of the most magnificent properties have been built by families wishing to live here. The Algarve has proven to cater extremely well to young families. The quality of education, safety and lifestyle are hard to beat and now parents can work from home here too. For their homes, nothing but the best design and materials will do and our Savills colleagues from around the globe agree, these are some of the finest properties they have seen.