By: CECÍLIA PIRES
PROPERTY PRICES in the Algarve are beginning to slow down and it is taking longer to sell properties but the region’s homes are still among the most expensive in the country.
A survey by Confidencial Imobiliário, a newsletter that focuses on real estate sector trends, also says that the negative forecast for the UK economy and the weakening of the British pound in recent weeks are resulting in British investors’ reluctance to invest in the region.
This, says the newsletter, may have a real effect on the Algarve market as the British are the most significant investors in the region’s real estate.
However, some key locations continue to have some of the highest prices per square metre in Portugal.
Areas such as Vale de Lobo and Quinta do Lago, the survey says, have a square metre cost of up to 4,300 euros, double of the price of the most luxurious spots in Lisbon or Porto.
Even these hotspots have registered a drop in prices, as a sq metre for a luxury apartment reached 5,000 euros in 2007 according to the Portugal-The Luxury Residential Tourism Market 2008, a report released by IRG, International Realty Group, an affiliate of Christie’s, and by Prime Yield Chartered Surveyors.
The price per sq metre for villas last year was around 3,000 euros in the most exclusive areas, the study said.
Figures from the real estate professionals association, Associação dos Profissionais e Empresas de Mediação Imobiliária de Portugal (APEMIP), estimate that there are 450,000 properties for sale in Portugal at present.
Confidencial Imobiliário survey says that more than half of these, around 292,000 houses, are in the Algarve, Lisbon and Porto. And of these, it says, more than 250,000 are on the market “at above their real price”.
Properties are also taking more time to be sold. In 2007 it would take between six and seven months. At the moment the average time it takes to sell a house is between nine and 10 months.
It is estimated that the average annual appreciation rate in the real estate sector is presently at 2.5 per cent for used houses and three per cent for a new build.
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