The Changing Property Market in Portugal

By: Pauline Felward

The overseas property market is changing rapidly - any glance at the newspapers in the UK will tell you that conditions are far from easy for buyers and builders alike. In order to survive, the industry will have to adapt and make sure that it is reaching the new parts of the market to attract the customers it needs.

The same goes for overseas property agents and developers, and given the recent scandals and hard times experienced on the Iberian peninsular, it could be surprising to find that Portugal is looking ahead to the future with optimism. In fact, given the style and status of some of the new developments that are being promoted, Portugal's property market gives the impression of being a country on the up.

The recent release of the Palacio da Quinta resort (labeled a "six-star resort, and scheduled to be fully open in 2010) and spa on the Algarve is a perfect example of the confidence Portugal has to continue attracting new blood into the market while still playing to its strengths. For one thing, this is a hotel and apartment development on the Algarve that isn't part of a golf course - in fact, none of the apartments overlooks a fairway or green at all. While this is something of a departure for the region, golf lovers will find there is plenty to keep them occupied, as the site sits adjacent to one the more famous courses in this part of the world - Quinta do Lago.

Similarly, buyers of the 79 apartments that will go along with the hotel will have some of the most luxurious facilities available on the Algarve. Each apartment has a private terrace Jacuzzi to compliment the marble flooring and high-end fitted kitchens and bathrooms. Each apartment also comes with two underground car parking spaces, but if you don't have your own car in the Algarve, there are a couple of services offered by the 24 hour concierge that could help you out. There is a chauffeur service attached to the hotel, and should you wish to arrive in even more style, private jet and yacht charters can be arranged.

Even though the one-bedroom apartments start from ?800,000, most potential property buyers will be likely to take up the finance options that have been organised through the developers to allow borrowing of up to 80 per cent of the apartments' value. While the traditional markets for property in Portugal have been for larger, spacious projects on golf courses or within sight of the rolling Atlantic, the movement of buyers throughout the rest of the country to find the best deals has introduced a different type of development into the market.

In Central Portugal, an hour away from Porto, is the seven-hundred year old medieval village of PÃ?voa DÃ?o. This hilltop settlement, which has traces of Roman occupation and confirmed Roman pathway running through it is being restored along the lines of the original buildings and offered for sale as 45 authentic cottages built from local materials. This is the first time such a village has been restored in this way, and it is important to note that this is a restoration project, and not a new development. Such is the commitment to preservation of the original village that the two remaining inhabitants of the old village have been embraced by the developers, and are now an integral part of the success of the project. Mr. Soares and Mrs.Mercinda have had their rustic cottage completely renovated by the Catarino Group to introduce modern facilities for the first time, and are now employed tending the 120-acre farm surrounding the village on behalf of the developer. The farm grows the organic vegetables used in the village restaurant.

Prices for the cottages start at a very reasonable €165,000 (?132,000), which should attract a different kind of overseas property buyer to the region, while at the same time creating a development that should have a life and a real atmosphere throughout the year.

In a market where adapting to conditions is likely to be the key to prospering into 2009, the property market in Portugal seems well-placed for the future.

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