2024 Q1 Market Update

Quick 2024 Q1 Market Update

           Amidst a backdrop of global political and security concerns, the Algarve property market experienced a brief deceleration towards the end of 2023. Contrary to initial concerns, the market swiftly regained momentum in January dispelling any lingering apprehension and underscoring the enduring appeal of the Algarve. A market where demand continues to outstrip supply in the premier real estate segment.

Concerns about how reliant the Portuguese property market was on the Golden Visa and Non-Habitual Residency (NHR) schemes proved unfounded. Only a very small proportion of foreign buyers of luxury property here in the Algarve actually bought for those reasons. Our own market research conducted alongside a number of local lawyers estimated that only 2% of our buyers were primarily driven by one of these schemes. There are numerous alternative visa options and investment programs which offer similar solutions, some of which may even be more appropriate. Even though a good number of our clients did apply for NHR status, it was often looked upon as an additional benefit once our clients were already invested but rarely was the main motivation to purchase property in the first place. NHR status was available to new Portuguese residents and renting a home was a possible alternative.

The changes in the laws surrounding rental licenses, the AL (Alojamento Local) are causing some concern to investors. For property owners wishing to short-term let their properties, obtaining licenses has become more complicated. Therefore, we would recommend that vendors and buyers deal with a well-informed agent and get good advice from their lawyer.

We have already noticed more urgency in the market. Transaction times (from an agreed sale to completion) have shortened. The average time to complete on a purchase has typically been 4 to 8 weeks – with some completing within a matter of a few days. The buying process in Portugal is very simple and unless either buyer or seller prefers a longer completion period, sales can easily be finalised within a matter of weeks.

So, in comparison to the same period last year, our YTD figures paint a compelling picture of resurgence and growth. Enquiries increased by an impressive 6%, the number of sales grew by 25% and the team have generated €35.2 million worth of property sales for our clients within the first quarter of this year. Year to date this figure has now reached €45.4m. All confirming continued strong demand and confidence in the market.

Furthermore, we are seeing a slight increase in the number of properties currently on the market – offering buyers a little more choice.

Our average sale price is down slightly, but we suggest this has more to do with the type of properties currently being sold as opposed to any reductions in property values. Property owners remain steadfast and on the whole, are wealthy so will only sell should the right offer come in. Interestingly we are seeing higher values being achieved in our country market – covered by our Loulé office. Due to continued price growth in the coastal areas and resorts, we are witnessing strengthened demand for the beautiful inland and surrounding areas. We don´t anticipate price softening at the top of the market as our clients seem more than happy to keep their money in the Portuguese property market – it has proven robust over so many years and weathered all the storms over the last 25 years.

Furthermore, we anticipate a significant increase in demand for property across the coast. The Americans have most certainly discovered the allure of Portugal and with their strong dollar and sheer numbers are already investing in the country. We predict this to be a growth area in the coming years. We actually recommend that any interested buyer invest now. With United Airlines introducing direct flights to Faro, we anticipate considerable price increases over the next 12 to 18 months. In November 2023 more Americans bought property in Portugal than the Brits! This is quite unprecedented.

Mortgages are becoming more accessible and cheaper and we do recognise that this is fueling the general property market in Portugal. From our perspective, 97% of our buyers continue to be cash buyers.

Over the past 12 months, inflation rates have dropped considerably from 8% to 2.6% also indicating further confidence in the financial and real estate markets.

The forecast for 2024 is bright. Our brand undeniably plays a pivotal role in our success. We would argue that we have the biggest marketing budget among our competitors, supported by a team of professionals that is unrivalled not only in numbers but also in delivering proven results and providing both buyers and sellers with unparalleled local expertise complemented by a phenomenal global reach through our steadfast association with Savills.

Our team of dedicated Special Agents is here to support you with your property needs. If there is anything we can help you with…please get in touch!

Alison & Kerstin
Co-Owners, Directors and Sisters
info@qp.pt | +351 289 396 073 | qp.pt