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The Algarve Portugal: Property Investment

4th November 2010: Algarve Property Investment

The Algarve in Portugal is still one of the most popular destinations to northern Europeans looking for a holiday or retirement home. Why? The list is long but the location could not be better: only a 2-3 hour flight from all Europe’s major cities makes it cheap and easy to get to and with arguably the best and most established leisure services in Europe, beautiful clean beaches, long season, solid rental returns and very high quality building standards, buying a property in the region remains an excellent long-term investment.

But just because something has a proven track record does not always mean it’s future is certain. Even though most rental companies and hotels boast 100% summer occupancy and the Algarve’ property market has delivered a steady average annual capital appreciation of over 5% for the last 30 years, what is to say this will continue long into the future? There follows a useful summary of the key indicators for sustainability and growth in the Portuguese Algarve property market. Despite global economic uncertainty and recent price corrections everywhere, the Algarve property market has stabilized quite quickly. Yes there are many areas where you can still pick up a very good bargain if you look with the right estate agent but there are also many areas where demand remains as high as ever. Try looking for a distressed owner in the Algarve’s exclusive Quinta do Lago – not easy when luxury villas still change hands regularly for between 1 – 10 million euro.

High build specifications have always been one of the Algarve’s main selling points which underpins market stability – people are always prepared to pay for quality and it also takes more time and effort to deliver, thus reducing supply. The relentless pursuit of perfection does not stop with cautious developers but local authorities in Portugal are well known for their conservative approach and careful planning. Just ask the developers who have to follow a planning process as rigorous as any found in northern Europe. They don’t throw up any old rubbish here and again this also underpins stability – the market is not flooded with hundreds of poorly planned communities, only the quality and amount of property the market demands. Rules for low-density, low-rise construction and no building allowed within 500m of the sea is also a major factor.

So the Algarve is a shining example of how to build and maintain a healthy economy through careful planning, control and investment in first class tourism communities and infrastructure. But who didn’t know that? Well, here are some other facts about infrastructure that will give every potential property buyer confidence for the future.

· 750 million committed to the development of Vilamoura to extend the current 800 berth marina (already the largest in Portugal) by 300 berths, create a new residential and leisure area, several new luxury hotels all based around a stunning lake and parkland area. · 400 million euro spent in 2010 by Ryan Air on expanding their presence at Faro Airport. This will see an increase of over 200 local jobs (1,300 already) and an extra 1.3 million passengers annually. · 195 million euro spent to date on the new Formula One Racetrack in Portimao. Opened to the public in 2008, this now hosts regular events and attracts many annual visitors. On the site is a state of the art Radisson apart hotel and business centre where Porche build some of their super cars. · 130 million euro programme of investment by the Portuguese Airport Authority (ANA) to enable Faro to manage 2,400 passengers per hour. · A new airport planned in Portimao to cope with demand for the Western Algarve and thanks to economy airlines, additional flights are appearing in many regional airports throughout northern Europe. · 100 million euro committed to golf development in 2010 including upgrades to many of the existing courses, the launch of the exclusive new Laranjal course in Quinta da Lago and the expansion of Palmares in Lagos from 18 to 27 holes · 20 million EUR has been spent since 2004 on the A22 – the main arterial road that traverses the region and now stretches from beyond Lagos in the west all the way into the Spanish Algarve to the beautiful city of Seville! Journey times have been halved. · 5 million spent in the picturesque town of Cabanas de Tavira, Eastern Algarve on a brand new marina and promenade. · Several corporate R&D ventures from the likes of Porche, Audi and Vodafone have also brought multi million euro investments to the Algarve. · A major new Marina in Olhao has opened on the Eastern Algarve with phase 2 planned for 2011.

The “Algarve” brand is firmly established in the minds of northern Europeans – it is a very well established market and will remain so. If you are considering buying a home abroad for retirement, holidays or investment look no further for a safe and secure property purchase.

Posted by Rob Shaw Elite Algarve Properties T: +44 (0) 208 529 3635 E: 1: 2: 3:

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