In the current buoyant
property market, there is logic in taking a step back and reassessing your
investment goals in light of potential risks, especially as some areas are
becoming priced for perfection.
If you bought an
investment property or are considering to down size you may want to consider
selling into a strong market. Can property prices go higher? Yes, but nobody
ever lost money taking a profit. When new price records are set it is often due
to foreign buyers who are less familiar with price development in an area.
Buying a property in the Algarve
is also made easy when one sells up back home in a strong market. People who
apply for the Non Habitual Residence program can also justify spending more on
their ideal property, as the program offers a 10 year tax holiday.
Sometimes people pay
over the odds for their ideal home. We call this an emotional buy in which case
other considerations are more important than just making a return on
investment. There is no right or wrong in this and whether the purchase was a
good decision can only be decided in hindsight and may vary from homeowner to
popularity of the Algarve
as a destination has led to increasing prices for both hotels and private
rental accommodation alike. After two consecutive record breaking years of
total number of visitors, it remains to be seen if 2018 will bring even better
results. The combination of higher prices for accommodation and flights can
eventually lead to a decline in demand.
Here are some reasons
changes to the NHR program
yields have topped out
taxation on short term holiday rental income has increased and may increase
further in the future
introduction of a tourist tax
introduction of limiting factors regarding short term holiday letting (AL) legislation
….and from a macro
economic point of view:
of a trade war between the US
and Europe spreading beyond steel which could
cause damage to the economic recovery.
balance sheets of European banks are still not healthy. More deleveraging needs
to be done. A populist government in Italy
may revive financial instability across Europe.
Unlike Greece, Italy
may be too big to fail but also too big to save. Banks may not be strong enough
to deal with the fall out.
A return of financial
instability and slow down in economic activity in Europe
may hurt the property market. Food for thought when you are considering selling
your property or pursuing your dream home in the Algarve.
consultants at Land &
Houses Algarve have been living in the Algarve for a great many years and
are experts in walking you through each step of the buying and selling process.
We are currently looking to add quality properties all across the Algarve
for both our Portuguese and International buyers. Why not contact us today?
(First published by Land & Houses Algarve in June 2018 in the East Algarve and Simply Algarve magazines)