Portugal’s lockdown has started to be lifted and, with Covid-19 cases at less than a tenth of the UK and Spain, we can expect normality to return to the Algarve earlier than some southern European areas.
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Lockdown partially lifted
The lockdown began to be lifted in Portugal last Monday, with further easing more or less every fifteen days. Shops, gardens and libraries will all be able to reopen from then.
Estate agents, currently working remotely, will start returning to their offices in the later phases, as Fiona Thornton from Christie’s, specialised in high-end property nationwide, told us: “Over the next six weeks, we’ll have a phased reopening of everything. At Christie’s, we are aiming to reopen our offices in the second phase on the 18th May. Social distancing and face masks will be mandatory.”
Some hotels are expected to open around June, but flights are still likely to be later.
What is happening to the property market during coronavirus?
What impact is this having on the property market?
You might have seen a lot of talk about how the pandemic could cause a drop in property prices, but so far, the word on the ground is that the markets are still robust due to very high demand. As Fiona says:
‘All I can say is that I am seeing a higher rate of enquiries, especially from foreigners. If the demand is still there, there is no reason for the prices to drop, especially in the tourist areas. In fact, I think the past few months have given people the time to question what they really want from their lives and where they would like to be. My feeling is that people don’t want to wait anymore. Where we might see lower prices would be the commercial market, for shops and offices, until we find out new normal.’
The past few months have given people more time to question what they really want from their lives and where they would like to be.
Existing sales are still going ahead, with notaries and lawyers still working. In some cases, even new sales can take place, especially for off-plan developments. If the property is not yet built, you won’t see anything further by being in Portugal than what you have in the brochure, so, as Fiona tells us, investors are still buying now to avoid ‘missing out on the best apartments and prices’. With most reserving a unit with a €10-15k deposit, they know that that is secured, but still have the option to transfer to a different apartment in the development or be refunded before the promissory agreement if they decide not to invest.
Purchasing an existing property may be more difficult, but it can technically still go ahead from the UK. You’ll need to have engaged the services of a lawyer whom you have granted power of attorney. Normally, you would need to be present in the lawyer’s office to sign the power of attorney agreement, but the government is investigating a temporary allowance for the use of digital signatures. An announcement on this is expected next week.
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Is now a bad time for anyone investing in or owning a rental property?
Interestingly, coronavirus could have a positive effect on the rental market, at the very least in the Algarve – as long as you are ready to rent to the Portuguese market. Says Fiona, ‘One thing I would say is that social distancing means that many tourists are feeling more comfortable with the idea of renting a villa/apartment rather than a hotel. I’m seeing reports that these bookings are on the increase. This means anyone who has a property here that they would normally rent out for holidays could still have a summer season- I’d advise them to react quickly and contact management companies who work with the Portuguese market while the borders are effectively still closed.’
Golden visa changes put on hold
Further good news comes in the form of the golden visa scheme, which allows fast-tracked Portuguese residency for you and your family if you invest a set sum, usually €500,000, in property. In less built-up areas like the Alentejo, the figure is just €400,000 – and just €280,000 for renovations.
The golden visa scheme reforms have been put on hold – so get in while you can!
The scheme had been set to be gradually rolled back from popular areas like Lisbon, but that has been put on hold for now. So, if you’re looking to buy in or around the capital, now is absolutely the time to start planning.
What can buyers do now?
Make sure you’re at the front of the queue when restrictions lift!
With lockdown beginning to ease, we expect that when international travel is restored, the floodgates will open. There is a huge amount of pent-up demand – no wonder that the Prime Minister expects Portugal to come bouncing back – and if you wait until then to start the planning phase, you’ll find yourself at the back of queue compared to people who know what they want and have already started speaking to the professionals.
Fiona advises,’We’re using this time to make sure everyone has all of the right information about the market and procedures here in the Algarve. If they’re at early stages, like deciding an area of Portugal and an appropriate budget, then it’s about looking at finance and mortgages, currency exchange and legal advice – getting all of their ducks in a row before a trip. At this point, before they can get out here, I can send them over properties for reference (style, price, location).
‘It’s still a big decision and more than ever it’s important to get it right first time, so focus on the admin part and keep an eye on the travel restrictions, be ready. Make a list of questions and doubts and we’ll work through them together.’
‘Things are different at the moment, but essentially we’re still very busy and everyone is really just waiting for the flights to start up again. There is some urgency regarding a second wave and people should factor this into their plans, if it comes in September or October we could see further temporary closures so people should look at booking a trip sooner rather than later! We’re ready and waiting!!’
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