Having reached a figure of €1.17 at the beginning of February 2014, one pound now buys €1.34, which means a British buyer has seen a budget of approximately €175,000 rise to €200,000 in the space of just one year.
The current value of the pound is also at its highest since the beginning of 2008 - before the start of the global crisis whose first victim was the property market.
The pound almost reached parity with the euro in 2009, which at the time further exacerbated a strong decline in real estate activity, spurred on by the seemingly endless financial crisis.
Distinct increase in enquiries
But with the pound reaching highs not seen for the better part of the past decade, Anita Van Huson of the Algarve-based property portal Meravista.com told The Portugal News this week that there has been a distinct increase in Algarve property enquiries in recent months.
“Between November 2014 and January 2015, there has been an increase in enquiries of approximately 80 percent compared to the same period a year ago. Given that around 85 percent of Meravista’s enquiries come from the UK market, we can confirm that there is a marked growth in Algarve property interest from this sector”, she explained.
“While we can attribute some of the growth to the steady return of popularity for property in the Algarve as the recession wanes and the current tax-free pension policies attract attention, there is little doubt that the strength of the pound against the euro is also having an impact.”
Meravista also forecast that if the pound continues to remain strong against the euro, 2015 will be a bumper year in property sales in the region.
The only way is up
These sentiments were echoed by Chris White, director of boutique real estate agency Ideal Homes.
Referring to the strengthening pound, he underlined that savings are impressive for buyers just looking for a good value apartment, rather than a substantial villa, highlighting a series of such examples in Ideal Homes’ latest blog posting on its site.
Chris White revealed that the sales team at Ideal Homes has grown from a team of four to 12 in the space of just a year due to increased demand from an increasing number of potential home owners in the Algarve.
But despite the expanding sales team, Mr. White told The Portugal News: “The entire team is fully booked with viewings for prospective clients that we collect from the airport for the whole of February.”
Attributing the increased demand to the strengthening pound, Ideal Homes have witnessed sales for January 2015 shoot up to 18 from a total of 7 a year ago.
Mr White added that 2014 was a particularly good year, with sales in excess of 22 million euros, and with January well up on the same period last year, a promising year appears to lie ahead.
He added that prices have definitely bottomed out, and latest statistics point to an improving market and therefore a sustained increase in property prices a strong likelihood for 2015.
Interest will positively affect 2015
Susanna Gross of Togofor-Homes agreed with her colleagues with regards to the positive effects the weak euro has had on the property market, but cautioned that much of the interest currently being shown will take time to translate into sales.
“Many British house owners still have to sell their houses and are on inspection trips”, she said this week, arguing that “this positive influence will take some more time, but will positively affect 2015.”
Togofor-Homes also explained that “due to the positive development of the pound, some British owners here have raised and will raise their house prices.”
Some areas continue to struggle
José Bernardo, who owns two Remax agencies in the Algarve said his team also noted a sharp increase in interest from potential British buyers in recent months. He admitted this initially left his sales team somewhat perplexed, but has now attributed some of this interest to the stronger pound.
“Requests for additional information soared during the final quarter of the year and have carried on into January”, said Mr Bernardo.
He added that properties in some areas, such as Carvoeiro and parts of Albufeira, have seen growing interest and a rise in sales, while the selling off of the abundant offering of apartments in Portimão and Lagos remains an arduous task.
Algarve prices statistically behind Lisbon
This feature of the market, where there is an excess in supply for some properties and a shortage for other types, could perhaps explain why the Algarve has failed to match the rest of the country when it comes to figures released by Portugal Statistics.
Numbers this week indicated that while December recorded a slight set back, the Portuguese housing market closed 2014 up 0.3 percent, allowing the year to end with an average national price per square metre of €1,009.
The figures are based on bank mortgage approval evaluations. Portugal Statistics said that the North, Centre and Lisbon Metropolitan Areas put in positive year-on-year performances with the latter growing the most at 0.9 percent.
However, all other Portuguese regions turned in a negative result with property on the Atlantic island of Madeira dropping 8.4 percent over 2014.
The Algarve witnessed its property price drop down an annualised 5.4 percent to close the year at €1,223/m2 with December down 1.6 percent in month-on-month terms.
For every three trailers arriving, half a one leaves
International Removals companies are often the first to notice a change when it comes to arrivals and departures and are also privy to the habits of home owners on the move.
“We bring an average of about three trailers a week to Portugal, with about half a trailer returning to the UK”, John Scott, Managing Director of Algarve Removals told The Portugal News this week.
But he stressed that these trailers are not necessarily arriving with the personal effects of new arrivals to the Algarve.
“We have seen an increase in bringing over items that residents in the Algarve have ordered from the UK. This should be looked at positively, as it means more and more residents are now focused on remaining in Portugal when a few years ago, all that many of them wanted to do was to sell up and leave”, Mr Scott concluded.