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Off Plan is Back!

23rd April 2017: Demand for off plan has emerged in Algarve

In the last three years the Algarve property prices have seen a turn around and are definitely on the rise; the stock that existed when the financial crisis hit the market almost ten years ago has largely been exhausted. There is an acute shortage of property for sale and an abundance of buyers from just about everywhere has put tremendous pressure on prices.

The reasons for the increased demand are many, no trust in the banking system, low returns on bank deposits, historically low interest rates for home loans, fear of terror attacks in some European countries, the Golden Visa programme and of course the generous tax breaks the Portuguese government is offering to property investors. An interesting fact is that a big percentage of the purchases are actually paid in cash, no financing at all.

The demand is far outstripping supply and for the last half dozen years or more there was no new construction coming on stream. Builders that are in touch with the reality of the market have now started to build new apartment blocks, but nowhere near enough for the huge demand, with the result that the new products are being sold off-plan with completion dates in about 18 months.

Buyers are willing to invest in the new under construction properties as most of the developers have a proven record and have been in the market for many years and the new products coming onto the market are also much more modern then the existing stock with better finishes and big verandas.

This is not a new method of buying property but it was out of use for the last 7/8 years or so, and it is now becoming very popular again and the result is a huge increase in off- Plan and under construction investment; with a 20% deposit you can secure your investment and pay it off normally at completion, in about 18 months.

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