With Christmas fast approaching, thoughts and conversations turn to the year that was. So what really happened in the property market in 2012, and were things as gloomy as we are led to believe from the never-ending reporting of the ongoing financial crisis in the media?
Well, it certainly was a challenging year. How we long to experience again the heady days of 2006 and 2007 when everybody seemed to have smiles on their faces and the biggest problem we had was finding the time to schedule viewings with prospective clients, who genuinely wanted to buy a property.
Nowadays we have many more properties available for sale than willing buyers and the ‘buyers market’ hype in particular in the UK media has led in many cases to unrealistic offers being made to vendors, who feel that they have already taken enough punishment by dropping their prices several times in the last couple of years.
Buyers are understandably nervous and even though they have decided to go ahead and buy their holiday home or their retirement home, they want to ensure they pay a fair price in the current market, or even nab a ‘bargain’. They also feel that they are somewhat in the ‘driving seat’ so to speak.
This message has been reinforced heavily in the media and some feel that if they cannot achieve a purchase that meets the ‘bargain’ criteria then they should hold out for the ‘better’ deal.
Otherwise, people might think they didn’t know what they were doing! Unfortunately, this often means that they don’t get a deal at all and just sit tight waiting for something that’s never going to happen.
Reconciling the two very different perspectives on the market has proven to be difficult this year, and real estate agents have been challenged working in a market that has proven to be unpredictable in terms of the behaviour of buyers and sellers, to say the least.
In order to achieve a successful transaction, both the buyer and seller must want to engage to agree a price that goes a way towards meeting the objectives of both parties. As a seller, if you are determined not to agree a discount off the asking price, then perhaps this is not a good time to have your property on the market, as it is extremely unlikely it will sell given the market dynamic.
The reality is that there are more properties on the market than buyers at the moment, and this leads to offers being made that are less than asking price.
Likewise, buyers, if you are serious about purchasing a property then you have to decide whether you will actively search for a property that meets your criteria and try to negotiate a fair deal.
You are much more likely to succeed if you adopt an active approach and work with your real estate agent to agree a fair deal, instead of waiting for prices to drop further. You can’t predict when the market in a particular area will bottom out and provided you do your research and work with a reliable agent, the likelihood is that you will purchase the property you are looking for at an acceptable price. It’s also a truism that quality properties in a prime location will always sell well.
This latter approach has paid dividends for many serious buyers during the year and the reality is that across the Algarve a fair number of property sales have completed.
It has been a better year overall than 2011 and given that we are still busy viewing in early days December, traditionally the quietest month of the year, then I for one remain optimistic that this market will continue to perform. Yes, at lower volumes than in the past, but overall we live in a beautiful, peaceful, sun-filled country with many lifestyle advantages that continue to attract people who value these attributes.
By Mary Mangan
|| features@algarveresident.com
Mary Mangan is the Managing Director of Winkworth Real Estate Portugal. The company has properties for sale on the Algarve and on the Silver Coast.
