JULY & AUGUST 2012 |
www.opp.org.uk
LETTER FROM PORTUGAL & CAPE VERDE | 49 Letter from Portugal
The second home market in Portugal has been pretty quiet over the last few years, but Simon Perks is picking up on the signs of a recovery...
requires confi dence in their home market and the market in Portugal. They have not has this for the last few years. Hence the second home market in Portugal, and particularly in the Algarve, has been very quiet. Historically, economic cycles rotate about every seven years. We are now four/fi ve years into a recession and there appear to be signs that we are moving, albeit very slowly, out of it. Greece has agreed to stay in the Euro, a bailout has been agreed for the Spanish banks and both Ireland and Portugal are adhering to the terms of their rescue packages. In the UK, the Bank of England is encouraging banks to start lending to both companies and individuals in order to stimulate growth.
M
Portugal has a well regulated property market with regard to planning and development. As a result there is not the vast oversupply of speculative properties that there is in Spain. Portugal also have a well-deserved
ost buyers of second homes in Portugal come from the UK. The decision to buy
reputation for quality and exclusivity, with purchases being made for reasons of lifestyle rather than investment. The Portuguese authorities, the
major resorts, the developers and the banks have all recognised the prevailing circumstances and started to take action that will allow them to promote the Portuguese second home market and give individuals the confi dence to buy.
The major resorts and developers
have formed the ‘Portuguese Resort Association’ to develop a 10-year plan to sell a signifi cant number of properties into the north European markets. A number of Portuguese banks will shortly be receiving an injection of capital both to meet their legal requirements and to allow them to start lending to companies and individuals. One of the Portuguese banks is looking to offer competitive mortgage loans to individual buyers rather than to sell its properties at signifi cant discounts, as the Spanish Banks are doing. This will help avoid depressing the market. Boavista Golf & Spa Resort are about to commence the construction
of some new properties. Their Managing Director, Philip
Pope comments: “In spite of austerity measures and the bad economic climate, Boavista is seeing a slow return to the tourist property market. Clients are cautious, take their time in making a decision and are looking for value for money. Without question, clients expect a discount and/or a giveaway but they are showing genuine interest in properties on secure, well maintained developments that offer facilities and services.” Another important factor that determines whether individuals buy is the exchange rate. Over the last year GBP has appreciated by some 12% against the EUR and a number of experts are predicting a GBP/EUR exchange rate of 1.30 by the end of this year, with this being maintained as its natural level. This would, obviously, be of benefi t to any buyer from the UK. In addition it is predicted that interest rate for both GBP and EUR will continue at, or near, their current low levels for the foreseeable future.
The property market in Portugal is
Simon Perks is Managing Director of Perks Property fi nance Solutions Ltd and is the fi nancial correspond- ent of Portugal life and travel. He can be contacted by email at simon@
perks-pfs.com or by telephone on +44 (0)20 7389 0567
very quiet, with prices in some areas as much as 30-40% below their 2008 peak. In other areas prices have held up better but this is partly the result of a lack of transactions.
However it would seem that Portugal, due to these various initiatives and some forward thinking, is in a good position to take advantage of any upturn in the market occasioned by an improved economic climate.
Letter from Cape Verde
Real estate in Cape Verde is changing - much needed legislations and regulations are appearing to make it a safer place to invest
he Cape Verde real estate world has witnessed a remarkable change in the last couple of years – both in legislation, with new statutes coming into force and providing proper regulation (where previously it was insuffi cient or simply non-existent) and in general supporting infrastructure.
T
New roads and renewable energy projects have gotten fi nance approval from the government budget and had a big impact on hotels, resorts and the tourist industry in general. Indeed, Cape Verde saw tourism rise an impressive 22% in 2011.
The changes in regulation have come about from a need to establish rules and guidelines to the real estate and tourism industries. At the end of 2010, three statutes were approved: for the regulation of real estate promotion, condominium management and real estate broker and enlistment companies. Previously, these areas had not had any offi cial regulation. More recently, legislation was approved regarding the “access and practice in legal terms of the real estate
business and the inspection of such businesses”. Similar legislation was also approved for the condominium management companies.
Of the 23 estate agents operating from Sal Island back in 2007, only eight now remain in business. Most have closed their doors and moved abroad, or are now working in different lines of
“In 2010 statutes were approved for important areas that, previously, had no regulation”
business. Those estate agents who have chosen to remain must comply with the recent regulations. A legal entity previously approved by the authorities, trading under a license, having a valid insurance policy and being subject to inspection and (when necessary) discipline brings more security and confi dence to the real estate market. This, of course, also benefi ts the tourism and general foreign investment sectors.
Last week, Sal Island was the host of the 8thBusiness Meeting for Economical and Commercial Collaboration between China and Portuguese speaking Countries, under the subject of Integrated Investments for Sustainable Tourism Development. The event was held at the same time as the 4th Cape Verde Tourism fair, which was focused on the subject “Cape Verde: one destiny, a variety of cultures”. Tour operators, developers, travel agents, airline companies, developers and representatives of hotels and resorts were present – with a total of 46 exhibitors.
Both events were held in Santa Maria, where most of the investment is expected to be directed to. Such initiatives are especially welcomed at the moment, as property prices in the Sal and Boavista Islands have dropped an average of 50% over the last five years. Front line completed properties still have a huge demand, resulting in great market opportunities.
In the near future, we should be seeing several more legislation packs
João Miguel Medina is a lawyer (advogado) practing in Cape Verde. He is a partner in the law fi rm Neville de Rougment. Medina can be contacted by email at
jmmedina@ndr.pt or by telephone at (+238) 242 2061
to bring the necessary clarity and security for any investment in a new jurisdiction. Development of general infrastructure will also continue: energy, roads, public lighting and security are coming into shape. Perhaps it’s a little late, but it’s in line with the proper timing of the islands. After all, bear in mind that this is
Cape Verde and that “no stress” is the motto of these islands.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68