18 | DIARY OF... AN ESTATE AGENT WORDS | Suzana Bento
www.opp.org.uk | JULY & AUGUST 2012
Chills and thrills T
As the eurozone crisis causes buyers to be ever more cautious, estate agents have to step up to the challenge. Suzana Bento tells us about the ups and downs she’s experiencing in the Portugese real estate world
hings are certainly not how they used to be. Gone are the days when the offi ce phones, faxes and
email servers all rang with inquiries from keen buyers. The only challenge we had in those ‘good times’ was helping clients decide which villa would be most suitable for their lifestyles.
The European economic crisis has changed every aspect of the way my company sells property in the central Algarve. Portugal’s austerity measures add a thick layer of instability and uncertainty to the minds of every client. Every day brings a handful of new challenges. Each client requires a unique approach. Each vendor requires constant attention. Keeping the business relevant is as much an exercise in creativity as it is a strategy. As you can imagine, these circumstances make for a rollercoaster ride of endless chills… and thrills.
Headline Armageddon
Dramatic and downright scary news is published everywhere. Every day my team has to battle headlines like Portuguese Economy Contracts For A Sixth Straight Quarter (Bloomberg, 8 June 2012) and Eurozone Crisis Sparks Fear Of ‘Replay Of 2008 On Steroids’ (Reuters, 25 June 2012). We spend as much time discussing the eurozone´s infl uence in the niche area of the Golden Triangle as we do in actually showing the fi ner points of a property.
Unfortunately, there just doesn’t seem to be a magic solution. Those who waited for the French elections, the
Greek elections or those who continue to sit on the fence until the next EU economic summit will not be buyers any time soon. Fortunately, lifestyle (and I mean a luxury lifestyle, fi lled with blue skies, golf, golden beaches and Michelin star cuisine) is desired by many. Some areas have been more affected by the crisis than others. Desirability is a key factor. It’s those simple economic principles of supply and demand, though there is a whole lot more supply than ever before. At the end of the day, quality product and quality of life are still a sound long- term investment.
Forex Fears Historically, the British have accounted for the majority of second- home buyers in the Algarve. They fl ock here on inexpensive fl ights to
“Austerity measures add a thick layer of instability and uncertainty to clients’ minds ”
Faro to bask in 300 days of sunshine. They take advantage of – well, at least, they used to take advantage of – favorable exchange rate between the euro and the British pound. Now, there is an air of skepticism. We frequently receive emails like this from our active British clients:
“After a lot of consideration we have
decided to put off our search for property in the Algarve as reports I am getting
Suzana Bento is Owner and Managing Director of Mapro Real Estate and Formosa Interior Design. She specializes in luxury property sales in the Golden Triangle of the central Algarve, Portugal.
info@maprorealestate.com www.maprorealestate.com www.formosainteriordesign.com
indicate the property prices are still falling and the euro is also getting weaker. “In Portugal, for example, the historical ratio between house prices and wages (or between house prices and rents) still has not reverted to the mean; implying further falls to come. Mortgages in Portugal and other Southern European countries remain very diffi cult to obtain with no turn- around expected in the short term. There is also a substantial overhang of unsold properties depressing prices. When you factor in the fact that the euro is likely to fall further against sterling, the fundamentals do not look very attractive. “I will, however, keep looking at the market and when I feel the market has hit rock bottom I will be in touch.” On the other hand, we are now seeing buyers from other Northern European markets coming to the Algarve: Swedes, Norwegians, Belgians, Germans, Dutch and Russians. No doubt, they have discovered the lifestyle benefi ts of this region. More importantly, their stronger economies afford them better positioning to take advantage of property investment opportunities. We are aggressively courting these
Combatting fear | Putting buyers’ minds at ease is now a big part of Suzana’s job
markets. We are partnering with established agents in the areas. We market to their databases of clients, promoting Portugal as the ideal location for a second residence. We are joining trade organisations in these countries to develop relationships and we are changing our website to attract these potential clients online. We are mining clients from unchartered territories.
Offending Offers Everyone’s looking for a bargain. And why not? Diffi cult markets often present interesting opportunities. Unrealistic offers are being made on properties all the time, even in the higher end locations where property is less affected by excessive supply. But, at the end of the day, cash is king and every buyer wants to feel they are getting a good deal.
Redesign for Rental
Sellers not comfortable accepting a low offer have to hang on to their property for indeterminable periods of time. Most realise they can generate income on the holiday rental market, which is in high demand. At Mapro´s sister company, Formosa Interior Design, we have also adapted to the new market demands. In addition to being involved in the creation of new villas and furnishing newly bought villas, we have been more and more involved in refurbishments in the rental market We offer solutions that allow home
owners to weather the economic storm a little better. Sometimes, clients just decide to sit out the storm altogether and redecorate their home for their personal use. Indeed, the property sales business
in Portugal is not as it used to be. My work days now are fi lled with more challenges than offers. Yet, I consider the opportunities and solutions that result from these challenges as part of the evolution that will make us stronger.
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