Christopher Nye, senior editor at Property Guides, has shared his expertise on why now is a good time for Brits to be looking at the overseas property market.
“Among the sectors taking the biggest hits from the global Covid-19 crisis are the tourism, hospitality and travel industries,” he said. “Allied to these is property, both on resorts where no-one is currently flying to, and in cities where businesses are shuttered and offices are empty.”
“So, with travel restrictions, recession and every country hunkering down, this will be the worst time to buy a residential property abroad, right?”
Not necessarily, Nye says. “Consider these factors. Our favourite overseas destinations locked down early and strongly and are already coming out of the other side. Countries like Cyprus, Greece, Portugal, Malta are FAR less affected than Italy, Spain or the UK. But even in badly-affected countries, areas like Sicily, the Balearics and Canary Islands are almost virus-free. By summer they could virtually be back to normal.”
He argues that property prices are likely to be down, but not for long. “While some analysts are predicting a shock to the system similar to the global financial crisis (where prices in Greece and Spain fell by 40%) others predict around a 1-4% drop in the next year. Either way, prices are almost bound to drop, but they were already at rock bottom in places like Greece and Italy,” he explained.
He also points to the fact that the property market is working well again. “Most estate agents, lawyers and other professionals are back at work.
It may be hard to imagine the fleshpots of Magaluf or Ayia Napa at full capacity this summer, but travelling over to view a few empty properties is a very different proposition. You can also get all your research done online, and even purchase without flying there. Many agents and portals are experimenting with ‘virtual’ viewings, including Rightmove.”
Nye also says Brexit will be a factor in encouraging people to act now. “The Brexit transition period is still due to end on December 31. Many think it may be delayed, but by no more than a few months,” he argued.
“Anyone wanting to retain their current EU rights to residence, healthcare and pensions in Spain, France and other EU countries will need to be resident by then. So as soon as you can fly, this summer will be a great time to retire to the sun and buy a bargain property abroad.”
Portugal’s reputation as a safe haven grows
Portugal has earnt international respect for its calm but strong response to the coronavirus, with only 30,788 confirmed cases reported and 1,333 deaths despite its close proximity to Spain.
The past few weeks has seen Portugal ease the lockdown restrictions it put in place in March, with businesses reopening their doors to visitors once again. The country, alongside Greece, Denmark and Germany, continues to be one of Europe’s success stories on managing the virus so far.
As a result, more than a third of hotels in the Algarve have already resumed business operations, while adhering to the Portuguese Covid-19 hygiene certification. Meanwhile, beaches are expected to open next month, just in time for what is normally the peak summer season for the tourism industry.
Portugal – one of the UK’s most popular destinations for holidaymakers and overseas homes – may be one of the countries that British tourists will be able to travel to this summer if air bridges are agreed between officials. Flights could resume as early as July 1 2020.
Ryanair, Europe’s biggest budget airline, has announced plans to offer 40% of its planned network of flights for the summer months, with hopes that government restrictions are lifted on EU flight travel and British holidaymakers will be able to spend their summer holidays in a safe place abroad.
It’s not just Portugal’s tourist industry that is set to resume, its property market is following suit. Consumers are allowed to buy and sell properties once again, as well as attending property viewings in person. The country has proven itself as one of the safest destination in Europe, which could further boost and confirm its status as the perfect choice for a second home for property buyers.
The Algarve, in particular, has one of the lowest population densities in Portugal, giving the region an advantage ‘as social distancing becomes a premium’. Ombria Resort is the newest luxury resort and real estate development in the heart of the Algarve and, as evidence of Portugal’s property market bouncing back strongly, has witnessed a surge in enquiries from potential buyers.
The resort is aiming to lead the way in green residential developments in Portugal, with sustainability and environmental protection key factors that have been built into each stage of the ‘extremely low-density resort environment’ and local community.
“As we inevitably move toward more remote working and adapting to hybrid home spaces, properties serving multiple of functions of home, office and holiday retreat will become more prevalent,” a statement from the company said. “Similarly, the importance of wellness, nature and sustainability is key for property buyers in deciding on future investments, all of which Ombria Resort is set to offer homeowners.”
You can find out more information on the freehold apartments, luxury villas and Viceroy residences available for sale here. Last month we carried out a Q&A with João Richard Costa, the director of sales and marketing at Ombria Resort, to understand why the eastern Algarve is somewhere for investors to consider.
“The Covid-19 pandemic has seen Portugal’s popularity increase as individuals rethink the way we work and live and demand increases for destinations in locations with low population density, such as The Algarve, where quality family time can be spent in contact with nature," Julio Delgado, CEO of Ombria Resort, commented. "I think that green space will become an even greater priority for residential real estate buyers and I believe that demand for properties in rural areas will increase."
He said Ombria Resort provides opportunities for buyers who want more work-life balance as well as a home that provides space, safety and peace of mind in addition to a high yield and capital appreciation potential.
"In the last two months, we have seen a significant 25% increase in sales enquiries from potential clients who are interested in the fact that Ombria Resort is a sustainable and low-density construction development."
Surge in user traffic for homes in Portugal
Sticking with Portugal, the latest findings from Lisbon-based real estate and property management portal Imovirtual has reported a significant increase in user traffic across its site.
Portugal started to ease lockdown measures from Monday May 4, with a three-phase plan to reopen the country’s economy. Joao Fernandez, the head of the Algarve Regional Tourism Board, predicts that international interest will return as of mid-June, with visitors from both inside and outside of Portugal seeking a getaway once restrictions are lessened across Portugal’s popular tourist destinations.
As stated above, beaches are set to open in June with health regulations in place to ensure visitor safety is paramount. With the Algarve experiencing little effects from the coronavirus, the region is seen as being in an ideal position to slowly open its economic and social activities.
Since the gradual reopening of Portugal’s economy, Imovirtual has seen user traffic soar, with these findings going hand-in-hand with airlines such as Wizz Air and Ryanair announcing that they will be resuming flights to and from Portugal from June and July respectively.
Imovirtual’s data reveals that user traffic grew by 38% for the seven days ending May 19 versus the same period in April. During the same time, users from the UK rose by 34%, in Brazil by 41% and Switzerland by 3%.
Those who have visited Imovirtual’s property portal are actively searching for rental property in Lisbon, Faro, Porto and Braga - all of which have reported a decline in rental property prices, making them affordable destinations to visit and relocate to.
The portal says this is encouraging for the travel industry in Portugal, especially during a period of uncertainty. Such data strongly suggests that prospective visitors are confident in returning to Portugal with the intention to ensure 2020 does see a summer holiday season.
With airports such as Faro International enforcing vigilant health and safety measures, Portugal believes it has the potential to welcome holidaymakers from near, far and wide.
You can find out the average rental property prices in Portugal here.