Can You Really Purchase Off Plan Property For Up To 70% Below Market Value?

Posted on 27th October 2010 in Investment

Can You Really Purchase Off Plan Property For Up To 70% Below Market Value?

You know how the saying goes “if it’s too good to be true, then it most likely is”?  Well in most cases that is correct, however many property developers who put these “two good to be true” concepts together are making investors a fortune if taken advantage of.  How?  Because the developers are simply selling their off plan property far below current market value.

Before going any further, it’s important to know what off plan property even is.  Off plan property is a property that is either currently under construction or has not begun construction yet.  At some point or another, every single property in the world went through its off plan phase.  When a developer decides to build in a certain area, he or she first needs to obtain planning (building) permission from the state or government before allowed to begin construction.  The developer can still buy the land and hold on to it while planning permission is pending, and in some countries the developer can even start pre-selling units before planning permission is even granted.  This is of course very risky to the investor as permission has not been granted but is done quite often.  Because the risk is far greater before planning permission is granted, the developer decides to incentive property investors with a discount that rewards them for taking on such risk.  Often times, the developer will state in the contract that if for any reason planning permission is not granted that the investor will receive a full refund plus a certain percentage of interest for tying up their capital.  (Don’t ever invest in to an off plan property unless this is clearly stated in the contract between you and the developer).

So let’s consider the fact that you, the investor were looking for a heavy discount in the market and decided to contact developers or investment firms that were recommending off plan property as an investment.  Take the price of a one bedroom apartment for example in North West London that costs on average £204,000.  If you were to purchase this apartment at market value, you are not leaving yourself with very much upside potential, unless of course you wanted to wait for the markets to appreciate over the next 7-10 years to see a sizable return.  To most aggressive investors, this is NOT an exciting investment strategy.  So you decide to look at off plan property as an option and you are told of a property that is currently being sold for only £170,000, but has not yet begun construction.  How can this be?  This is a 20% instant savings on a 1 bedroom unit very similar to the completed properties you have been looking at.  Because the developer is still obtaining planning permission, but is very confident that they will be granted rights, they decide to start selling units at a very heavy discount.  Remember, at this time the developer and his team have everything in place including renderings of the development, but are just waiting for the planning committee to give them the green light.  With a completion date set for two years out, you only need to put down 30% and nothing further due until the property is finished.  Depending on the location, a mortgage is not required until the property is built which gives you more time to build up your savings and borrow even less when it comes time to apply for a mortgage.  In many cases, by the time the property is complete, you may not even need to apply for a mortgage because you have saved enough funds to go ahead without it.  So with a property price of £170,000 and only 30% needed to lock in this transaction, you only need to come up with £51,000.  And it’s get better…

Once planning permission is approved, the investment case dramatically changes because now the property is guaranteed to be built.  This gives the developers the confidence to ask for more money on each unit.  It also gives the banks the confidence they need to finance the development in line with the developers needs.    Immediately the developers raise the prices on each one bedroom unit to £185,000 giving you an instant unrealized gain of 8.8% in just a matter of months.  Typically at this time, there is a rush of investors to get in on this new build, and if there’s enough hype you may even be able to sell your property to the next investor which would give you a profit of £15,000 or a 29% realized capital gain on your initial 30% deposit.  Because you only invested £51,000 and your take home is £66,000, you genuinely are able to see big returns in a very short period of time.

Now let’s imagine that you decided to hold on to your property or there wasn’t enough hype in the market for you to be able to sell just yet.  You now wait until the second phase in the property investment which typically occurs when the developers break ground.  At this time, you can expect the prices to go up again, but not by as much as they will when the property is completed.  On average you may expect the price of the property to rise roughly 5-10 percent and in some cases maybe 15%.  Let’s be ultra conservative in this case and say that the property only went up another 5%.  The value of your property is now worth £194,250 and the developers begin to list the investment at this price therefore giving you another opportunity to make even a bigger gain on your 30% deposit.  If at this time you were able to sell your property you would now be taking home £24,250 which increases your gross capital gain on cash employed to 47.55% in just one year.

Finally when construction is complete, the developers officially launch the development to the public and sell each unit at market value.  By this time, you have two options.  One, take out a mortgage and continue to wait for the property to appreciate to a price that you would be happy with.  Two, sell the property to a new investor that is happy to purchase this completed property at market value which in this case is £204,000.  Let’s say that everything worked out perfectly and you were able to sell the property immediately before applying for a mortgage.  You would now be taking home £34,000 (£204,000 – £170,000) giving you a realized capital gain of 66.67% increase in just two years.

This aggressive property strategy is known to many savvy investors as “flipping” and must be done in line with your financial situation.  If you cannot afford to hold on to the property when it comes time to apply for a mortgage, then you should not enter this strategy with the intentions of flipping it before completion.  You may get caught out not being able to sell which then forces you to take out a mortgage, therefore generating a massive burden on your financial situation if the mortgage payments are not in line with your financial budget.  On the other hand, for investors looking for “a quick buck” (or pound in this case) can absolutely do so through the use of off plan property.  It doesn’t always work out this way of course and more times often then others will you need to hang on to your property for a little bit longer then you originally planned, but if your financial situation permits it and your financial advisor highly recommends the investment, then go for it!  It’s OK to take on little bit of risk every once and a while in order to see the potential big rewards.

So now that you understand how the strategy works, how do you know which off plan property to select?  You should always speak to an investment advisor regarding the purchase of off plan property.  Real estate agents aren’t qualified to give you the investment advice needed, and if you want the real story its best you speak to a financial advisory firm.  One firm in particular that has been recommending off plan property to its investors for many years is Elite Global Property based in Shanghai, China.  Before every recommending this strategy to their investors, they gain a comprehensive understanding of your financial situation before deciding whether or not this strategy is for you.  All of their off plan recommendations are accompanied with an investment guide on both the property itself, but more importantly the area in which the property is located.

So, can you really purchase off plan property for up to 70% below market value?  Absolutely, and savvy investors do it all the time.  How do you think they become so wealthy?  It’s definitely not by purchasing property at market value.  There are always good deals out there and desperate developers who are willing to sell their units to you far below market value in the beginning stages of construction.

You know how the saying goes “if it’s too good to be true, then it most likely is”?  Well in most cases that is correct, however many property developers who put these “two good to be true” concepts together are making investors a fortune if taken advantage of.  How?  Because the developers are simply selling their off plan property far below current market value.

Before going any further, it’s important to know what off plan property even is.  Off plan property is a property that is either currently under construction or has not begun construction yet.  At some point or another, every single property in the world went through its off plan phase.  When a developer decides to build in a certain area, he or she first needs to obtain planning (building) permission from the state or government before allowed to begin construction.  The developer can still buy the land and hold on to it while planning permission is pending, and in some countries the developer can even start pre-selling units before planning permission is even granted.  This is of course very risky to the investor as permission has not been granted but is done quite often.  Because the risk is far greater before planning permission is granted, the developer decides to incentive property investors with a discount that rewards them for taking on such risk.  Often times, the developer will state in the contract that if for any reason planning permission is not granted that the investor will receive a full refund plus a certain percentage of interest for tying up their capital.  (Don’t ever invest in to an off plan property unless this is clearly stated in the contract between you and the developer).

So let’s consider the fact that you, the investor were looking for a heavy discount in the market and decided to contact developers or investment firms that were recommending off plan property as an investment.  Take the price of a one bedroom apartment for example in North West London that costs on average £204,000.  If you were to purchase this apartment at market value, you are not leaving yourself with very much upside potential, unless of course you wanted to wait for the markets to appreciate over the next 7-10 years to see a sizable return.  To most aggressive investors, this is NOT an exciting investment strategy.  So you decide to look at off plan property as an option and you are told of a property that is currently being sold for only £170,000, but has not yet begun construction.  How can this be?  This is a 20% instant savings on a 1 bedroom unit very similar to the completed properties you have been looking at.  Because the developer is still obtaining planning permission, but is very confident that they will be granted rights, they decide to start selling units at a very heavy discount.  Remember, at this time the developer and his team have everything in place including renderings of the development, but are just waiting for the planning committee to give them the green light.  With a completion date set for two years out, you only need to put down 30% and nothing further due until the property is finished.  Depending on the location, a mortgage is not required until the property is built which gives you more time to build up your savings and borrow even less when it comes time to apply for a mortgage.  In many cases, by the time the property is complete, you may not even need to apply for a mortgage because you have saved enough funds to go ahead without it.  So with a property price of £170,000 and only 30% needed to lock in this transaction, you only need to come up with £51,000.  And it’s get better…

Once planning permission is approved, the investment case dramatically changes because now the property is guaranteed to be built.  This gives the developers the confidence to ask for more money on each unit.  It also gives the banks the confidence they need to finance the development in line with the developers needs.    Immediately the developers raise the prices on each one bedroom unit to £185,000 giving you an instant unrealized gain of 8.8% in just a matter of months.  Typically at this time, there is a rush of investors to get in on this new build, and if there’s enough hype you may even be able to sell your property to the next investor which would give you a profit of £15,000 or a 29% realized capital gain on your initial 30% deposit.  Because you only invested £51,000 and your take home is £66,000, you genuinely are able to see big returns in a very short period of time.

Now let’s imagine that you decided to hold on to your property or there wasn’t enough hype in the market for you to be able to sell just yet.  You now wait until the second phase in the property investment which typically occurs when the developers break ground.  At this time, you can expect the prices to go up again, but not by as much as they will when the property is completed.  On average you may expect the price of the property to rise roughly 5-10 percent and in some cases maybe 15%.  Let’s be ultra conservative in this case and say that the property only went up another 5%.  The value of your property is now worth £194,250 and the developers begin to list the investment at this price therefore giving you another opportunity to make even a bigger gain on your 30% deposit.  If at this time you were able to sell your property you would now be taking home £24,250 which increases your gross capital gain on cash employed to 47.55% in just one year.

Finally when construction is complete, the developers officially launch the development to the public and sell each unit at market value.  By this time, you have two options.  One, take out a mortgage and continue to wait for the property to appreciate to a price that you would be happy with.  Two, sell the property to a new investor that is happy to purchase this completed property at market value which in this case is £204,000.  Let’s say that everything worked out perfectly and you were able to sell the property immediately before applying for a mortgage.  You would now be taking home £34,000 (£204,000 – £170,000) giving you a realized capital gain of 66.67% increase in just two years.

This aggressive property strategy is known to many savvy investors as “flipping” and must be done in line with your financial situation.  If you cannot afford to hold on to the property when it comes time to apply for a mortgage, then you should not enter this strategy with the intentions of flipping it before completion.  You may get caught out not being able to sell which then forces you to take out a mortgage, therefore generating a massive burden on your financial situation if the mortgage payments are not in line with your financial budget.  On the other hand, for investors looking for “a quick buck” (or pound in this case) can absolutely do so through the use of off plan property.  It doesn’t always work out this way of course and more times often then others will you need to hang on to your property for a little bit longer then you originally planned, but if your financial situation permits it and your financial advisor highly recommends the investment, then go for it!  It’s OK to take on little bit of risk every once and a while in order to see the potential big rewards.

So now that you understand how the strategy works, how do you know which off plan property to select?  You should always speak to an investment advisor regarding the purchase of off plan property.  Real estate agents aren’t qualified to give you the investment advice needed, and if you want the real story its best you speak to a financial advisory firm.  One firm in particular that has been recommending off plan property to its investors for many years is Elite Global Property based in Shanghai, China.  Before every recommending this strategy to their investors, they gain a comprehensive understanding of your financial situation before deciding whether or not this strategy is for you.  All of their off plan recommendations are accompanied with an investment guide on both the property itself, but more importantly the area in which the property is located.

So, can you really purchase off plan property for up to 70% below market value?  Absolutely, and savvy investors do it all the time.  How do you think they become so wealthy?  It’s definitely not by purchasing property at market value.  There are always good deals out there and desperate developers who are willing to sell their units to you far below market value in the beginning stages of construction.

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Superior Gold Group- Your Way To The Gold Market

Posted on 12th October 2010 in Investment

Superior Gold Group- Your Way To The Gold Market

Gold has always been among the top few when it comes to selecting the most trusted currencies. This has remained this way right from the medieval times. It is one of the reasons why gold is often referred to as a global currency and is widely acceptable across the world. In these tough times of recession, people are on the lookout for a safe venture to invest their money. The gold market is considered to be one of the most promising investment options available today.

Realizing the huge potentials of investing in the gold market, many people have directly and indirectly invested in this venture. This has also paved the path for the rise of a huge number of companies and websites offering their assistance to such investors.

The gold market is considered as one of the most lucrative investment options available today. This wide spread popularity owes to the fact that gold prices cannot be controlled by a single government or nation. Therefore it finds application as an international currency as well. It has maintained its value all these years and therefore considering it as an investment is definitely a wise choice.

Even though there are many favorable factors which justifies investing in the gold market, it does not mean that it is devoid of all risks. If you are not careful with your selection, this might well turn out to be a very bitter experience. The primary requirement before making any sort of investment is to ensure that you have adequate knowledge about the working of that scheme. Similarly, one should also be aware of the uniqueness of the gold market before investing on the same.

One would find a large number of companies which offers various investment schemes, but it is extremely important to select your company carefully. They can help you to select the best investment option available and provide more information about them. Being up-to-date with all the latest trends of the gold market is essential to have a successful career.

It is also important to make sure that you purchase the gold from a reputed dealer. There are lots of metals which resemble gold, but are inferior in value. Therefore, it is important to ensure the credibility of the dealer before proceeding with the purchase. An expert will be able to help you choose the best scheme for you. Since this is a very sensitive sector, it is always recommended to utilize the services of an expert before investing in this market.

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Albania Property and Albania Real Estate Market

Posted on 17th September 2010 in Investment

Albania Property and Albania Real Estate Market

Albania Property Group is located in Tirana, the capital city of this beautiful country. Albania Property Group is made of a group of professionals whose main goal is to provide the clients with clear insight into the meaning of investment and purchasing property in Albania. Albania Property Group is a proven resource for property in Albania. Their expertise covers a wide real estate collection in ideal locations for living, retiring or investing in Albania. The company’s real estate inventory features a special assortment of: Albania Property, upscale residential homes for sale, condominiums, investment real estate, farms, mountain properties and vacation rentals.

Albania Property Group main goal lies in leading the clients interested on Albania Property to a successful real estate transaction. There has never been a better time for investing in Albania. Statistics from June record a 20% increase of tourist visits to Albania from the same period last year. One of the strongest points of the Albanian tourist industry is the local cuisine, a tempting blend of Greek and Turkish influences. According to the Bank of Albania, the tourism industry attracted in 170 million Euros in revenue in 2007, making it a major engine of national economic growth. Albania’s economic growth during 2007 was around 6% and in the same year, the government approved a fiscal package which ticks all the right boxes for investors. It included a flat rate of 10% on personal income tax, corporate tax and capital gains tax, no VAT on property purchases with foreigners allowed to own 100% of Albanian companies. In addition, the country has some of the cheapest property prices in Europe, with annual price growth of around 30% year-on-year in the capital – Tirana and coastal regions, indicating all the right ingredients of a newly emerging property market on the cusp of a boom.

New beachfront developments are being introduced with prices as low as 675 Euros/m2 in Vlora City. Also new beachfront development in Shengjin for as low as 29,750 Euros.

Independent lawyers available to help the clients with their dream purchase in Albania.

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Mallorca property market update June 2009 – from Mallorca Property Partners

Posted on 15th September 2010 in Investment

Mallorca property market update June 2009 – from Mallorca Property Partners

Certainly it appears the global economy has moved on in the last two months and we appear to be seeing some early signs of improvements signalling that the recession is starting to ease. The Organisation for Economic Co-operation and Development (OECD) has suggested that there are “tentative signs of, at least, a pause in the economic slowdown” in some countries – namely the UK, France, Italy, and China. Jean-Claude Trichet, the president of the European Central Bank, said recently that there has been a “slowing down in the decrease in GDP” and went on to note that certain countries were already reporting a pick-up.

There are also signs that housing market activity in the UK is picking up slightly, with mortgage approvals up slightly and surveyors reporting increased interest in house purchases. World stock markets too have recovered significantly from their low points in March.

All of this is good news, but our view remains largely unchanged as regards the overall state of the world economy and also the property market in Mallorca. That is, that there is indeed a slowdown in the rate of fall of the key economic indicators in some countries. And this could be a sign that the recession is gradually finding a its lowest point. We do not feel however that there will be a quick or significant rebound except for perhaps in the stock markets driven by traders who appear in the main to be flying in the face of what continues to be pretty dire economic and company performance data.

Furthermore some of the key actual economic indicators, and things the UK and other counties still have to contend with, look far from cheery. Unemployment could reach 9% in the UK, 10% in the US and 20% in Spain by the end of the year. This will undoubtedly have a negative effect on consumption and the housing market in these countries.

Added to this, these signals of recovery are not yet apparent in a small number of the biggest economies in the world such as the US, Germany and Japan. In many developing countries too conditions are still getting worse.

With all this in mind, we think it far too early to be heralding the end of the recession, or even that it has reached its ultimate low. It may be that we will see a modest return to growth in some countries in 2010, but it will take longer, possibly much longer, to return to the levels of activity seen prior to 2007.

On top of this there are still great concerns over the financial health of some of the worlds biggest economies. And the overall effects of the massive amounts of money pumped in to stimulate these economies is not yet clear. The IMF has warned that there could still be another trillion in losses for the financial sector as a whole before the crisis is over.

Our prognosis for the Mallorca property market

As above, there are plenty of solid reasons to believe there will be no significant uplift in property markets in any country, even the strongest such as mallorca, during the course of this year and most likely the first half of 2010 too.

On top of the global macro economic considerations there are factors specific to the Spanish property market that also put pressure on prices across the region. These are highlighted in the article mentioned above.

However, it is also very clear that activity has picked up for and that sales are being made, albeit at a relatively low level. There are a number of more positive factors that are contributing to this.

Euro interest rates are lower now than they have even been

The latest European Central Bank’s interest rate cut to 1.00% is the lowest level since the single currency’s creation. It is possible that the rate will be cut still further later in the year. Whilst it is likely that not all of this will be passed on to lenders, any lowering of consumer rates is positive and will help stimulate the markets to some extent.

In Mallorca we are seeing buyers are taking 50% loans so they have a hedge against any further significant currency fluctuations. Braver investors are seeking higher percentage Euro loans on the basis that Sterling will improve against the Euro and therefore, paying off the loan and converting the bulk of their Sterling at a later date will be to their advantage.

Reflecting this there was a small increase in the number of new mortgages granted in March although the number is still significantly down on last year.

Continue opportunities for property purchases at very low asking prices for Mallorca

This is the most important factor. Buyers in the Mallorca property market at present tend to be either professional investors, or private individuals who realise a) that there are some very good deals to be had in the current market and, b) that to delay looking for a property in the hope that conditions will move even more in their favour might mean missing out on a great opportunity that is available in the market right now.

We have written several times on this subject and you can read previous articles ono the subject via the links listed on this page of the Mallorca Property Partners website.

Overall our prediction remains that average property prices in Mallorca will drop further through to the end of this year, possibly continuing into the first half of 2010. We do not however think this drop will be as high as in other parts of Spain (predicted to be 10% overall this year and 12% next year by analysts at BBVA – one of Spain’s leading banks). The fact that there are active buyers in the market in Mallorca sets the region apart from most. And there are plenty of other solid reasons to set Mallorca apart from other parts of mainland Spain, the other Spanish islands, and most other international property markets too (see the “Green shoots” article referenced above).

But once again the over-riding observation is to not rely too much on market data and statistical analyses. This is because of the considerable variance in actual selling prices above and below the average prices in this unusual market environment. The reason for this is that the seller’s circumstance is a more powerful factor than in a “normal” market environment and this is not directly related to the usual determinants of the value of a property.

There are, therefore, some exceptional deals being done at price levels that are unlikely to be improved upon regardless of where average prices go to. To illustrate, see this selection of properties in Mallorca that have  either been reduced in price or listed at very low asking prices.

If you are reading this because you might be interested in buying a property in Mallorca, our advice is to monitor opportunities on an ongoing basis. You might see the ideal property right now and be able to get it at an unbeatable price. It is not easy though to identify the best opportunities, as not all owners are dropping the asking price but still may negotiate significantly when it comes to an offer.

Your best approach would be to brief us at MPP to use our experience and unrivalled contact base to look out for the best Mallorca property opportunities for you. Read more about what Mallorca Property Partners offer.

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The Stages of Dubai Property Market

Posted on 9th August 2010 in Investment

The Stages of Dubai Property Market

The real estate along with the property market was almost zilch a few years back. Amongst negligible revenue on the earned income and no tax on the living wage, Dubai captivated marketers and investors from all over the planet.

With the verification of foreign ownership the prospects augmented further and investors became extensively interested in the property of Dubai.

Due to the low-lying outlay, trade house and investors found it money spinning and profit yielding. But they were dubious about the globalization and evolution of Dubai for the reason that it had little productivity, lesser rate of literacy, low standards of living and consisted of people who earned merely to sustain a living.

But Dubai estimably located itself on the ladder of topmost commercial cities. It made a breakthrough via trade and globalization. Hence the immigrants started bucketing in. With this dawn of industrial encroachment and the delirium of the investors into the assets; the population of Dubai embarked on to augment.

The demand started to increase with a tempo that by no means satisfied the supply. The rates of property amplified significantly and are still growing. But in a brandishing city like Dubai, people find it cost-effective to buy estate even at hiked prices.

This headway had to slow down a little. Now the property tariffs are escalating at a lower rate as compared to few years back. This is all because of the demand and supply chart. The estate market has become a little stable than earlier.

Now the constructors do not let out the property for sale as candidly as they used to. Earlier the main concept was to acquire and to resell. This used to prolong in order to gain maximum proceeds. But now the constructors have become business minded. They do not agree to let out property prices sooner than the groundbreaking of the construction land. They even wait for the development of entire city in order to discern the accurate worth of the property and to attain maximum turnover.

Due to such marketing prototypes, the estate market is believed to have matured but this does not entail that it is in decline phase. Rather the market has dispensed with the conjecture fragment and has grown to be secure in all stipulations. This maturity in the market will lead to the enduring growth of the market and will direct it into a strong position.

Although the profit margins have condensed for new investors, there is still a demand due to low taxes and all the perquisites and amenities that Dubai proffers.

Also the demand protracts and will prolong in the potential times. Investment in property currently could harvest massive profits in terms of renting it to the tourists and then reselling it when market matures for their property

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The Property Market in Portugal

Posted on 30th July 2010 in Investment

The Property Market in Portugal

This is www.buypropertyportugal.com ‘s next chapter of how to buy a property in Portugal, here we focus on the Algarve as it’s currently one of the most attractive places to invest and to enjoy investment growth while enjoying the sunshine on the beach

 

The Property Market

 

Why not choose to base yourself in an area with over 3000 hours of sunshine each year and give yourself the quality of life you deserve?

 

 

Portugal is an attractive location for house buyers, with the Algarve being the most popular area for British buyers, mainly due to the weather, golden beaches, and the abundance of golf courses. It is Portugal’s busiest, most developed region and it is reported that 90 percent of all property sales to foreign buyers are in the Algarve.

 

The age of Internet and ADSL means that mobility of labour is very much a reality and it is easily possible to maintain instant contact with colleagues anywhere in the world. Satellite TV means access to English language television and VOIP systems give you a U.K. telephone number and U.K. calls at low rates.

 

There are excellent air connections to anywhere in Europe and intercontinentally from Faro or Lisbon airports, making it perfectly possible to base yourself in Portugal and ‘commute’ back to the U.K. Many of the ‘budget’ airlines fly into Faro from Stanstead, Luton, Bristol, Gatwick, Heathrow, East Midlands, Dublin or Manchester and offer excellent value charter fares. Additional routes come on stream during the summer months.

 

Where to Buy

 

The Portuguese property market is showing consistent growth, strong rental demand, relative living costs and safe environment.

 

 

There is a wide choice of great properties in wonderful locations and often less expensive than the equivalent in France or Spain.

 

Remember that the summer months in the Algarve, especially August, are very busy in terms of traffic and there are visitors from the north of Portugal and from Spain as well as holidaymakers from all over Europe, all expecting good access to the beach. Unless you enjoy being part of the crowd you may appreciate being a little removed from the bustle. Being just a few kilometers inland can have considerable benefit.

 

Don’t forget to take into account your proposed usage of the property, if you are expecting to live in Portugal permanently then the factors that affect your decision on what to purchase will vary from those required if you are planning to rent the property out for part of the year.

 

Many properties inland or ‘up in the hills’ do not have mains water or drainage. Instead they rely on a system of cisternas (tanks) to collect rainwater and store water brought in by or pumped from a ‘furo’ (a bore-hole), whilst a ‘fossa’ or sceptic tank contains and treats sewage waste.

 

All of these facilities are reliable and capable of many years of unattended operation. Bear in mind if you plan to re-plant the garden, water can be at a premium in the summer months and a new garden may require a bore-hole to be drilled to obtain the necessary extra water needed for irrigation.

 

Drilling companies charge per metre for drilling and then the cost of the pump, control equipment and electrical installation must be added.

 

At Exclusive Algarve Villas, we  try our hardest to give you the latest and most up to date information on the Portugal property market and costs.

 

Please feel free to question our consultants about anything to do with buying and investing in Portugal, in person, via email at info@eavillas.com or on the telephone (+351) 282 353 019

 

Portugal remains an exclusive location, with fewer of the ‘over development’ problems of some of its neighbours. The opportunity to buy quality property in a great location remains excellent but, like all good things in life, availability can’t last. Portugal is slowly but surely being ‘discovered’ and if you’re going to do it, now could be the perfect time to step in to this beautiful country!

 

Portugal is an utterly charming country and relatively speaking still overlooked by second-homebuyers.

 

Many areas have an exclusive feel and second-homebuyers and investors are waking up to the advantages of buying in a country which has not suffered the mass development of other parts of Europe, which is quick and easy to get to, and where the cost of living is still relatively cheap.

 

The Portuguese market is very active, with purchasers from across Europe.  There are plenty of Dutch, French, Spanish and Scandinavians buying, as well as the British. This means that to buy your dream property, quick and decisive action is often required. New developments are selling particularly quickly at the moment and many properties are sold from plans.

 

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Strategies For Buying Real Estate In A Slow Market

Posted on 12th September 2009 in Real Estate

The real estate market tends to be cyclical with some periods favoring buyers and other periods favoring sellers. As with other free markets, the pricing and availability of real estate is directly related to the forces of supply and demand. While many real estate markets in the United States are experiencing a substantial slowdown, other markets remain robust, and some even continue to grow. What makes the situation even more complicated is that even within a particular city or county, there may be some areas that are hot and others that are cold.

In regions of the country in which the real estate market is slowing, there are some things homebuyers can do to increase their chance of getting the property that they want on terms that are favorable. Below are some strategies to consider:

1. Clarify What You Want. Be sure to understand what kind of property you want (e.g. bedrooms, bathrooms, size, yard, location, etc.). Identify items that you “must have” and items that you would be willing to forego if your other priorities were met.

2. Consult Experts. You’ve no doubt heard the saying that “all real estate is local,” so arm yourself with the best information available. Consult a local real estate expert who can guide you about what communities are hot and which ones are not. Obviously, you are more likely to find deals in communities that have excess supply and limited demand than vice versa.

3. Understand Market Data. Obtaining and evaluating data can be one of the most powerful tools in your arsenal. Identify communities that you find desirable and ask your real estate agent to provide you relevant sales statistics. For example, your agent can provide you:

a. A summary of how many properties are available in communities that you deem desirable.

b. How long properties are taking to sell this month, last month, last quarter, last year, etc.

c. How many properties have sold this month, last month, last quarter, last year, etc.

d. Changes in the median and average price of properties for a community this month, last month, last quarter, last year, etc.

e. Data on the sales price to list price ratio (SP: LP). This ratio provides information about how much, on average, sellers are reducing their price.

f. Detailed data on properties that are similar to the type of property you desire (often known as “comparables” or “comps”).

4. High Inventory Communities. Identify, or ask your agent to identify, communities that appear to be particularly slow, and that have an unusually large inventory of homes. You will have a broader variety of options in these communities, and you may increase the likelihood of finding a better deal.

5. Loan Pre-Approval. Be sure to consult with your bank or mortgage broker and obtain a loan pre-approval document. This not only let’s you know how much you can afford, but it also demonstrates to sellers that you are a serious buyer and that your offer is worthy of serious consideration.

6. Seller’s Motivation. While information about why a seller is selling is usually confidential, there are situations in which the seller will allow their agent to disclose important factors regarding their personal situation. Be sure to ask your agent to inquire about any information that the seller has disclosed to his/her agent that can be conveyed to your agent. This information may help you decide on making an offer on a property and the price you wish to offer.

7. Home Inspection. A home inspection conducted by a qualified inspector can provide you valuable information about the condition of a property. Moreover, if there are items that need repair or replacement, you can use this information to modify your offer price or terms.

8. Expand Search Scope. As mentioned above, even within a particular city or county, there may be some areas that are hot and others that are not. Be sure to provided detailed information about what you want to your agent, so that he/she can provide you a variety of community options.

9. Be Patient. Time is on your side when there is excess supply and insufficient demand. Try not to “fall in love” with a house so much that you cannot be objective. It may be that multiple offers and counter-offers occur before you either get the property you want or decide to walk way from a deal. You may also want to look at more properties than you normally would, so that you are exposed to a variety of options.

While the above is not an exhaustive list of strategies, it is a good starting point of issues to consider when buying real estate, particularly in a market that favors buyers. Obtain the services of a knowledgeable Real Estate agent who can provide you with additional strategies to help you reach your real estate objectives.

San Diego Real Estate
Riverside Real Estate
Pacific Beach Real Estate

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Central San Diego Real Estate Market – Mid Year Snapshot Of Median Prices (2006) – Single Family Homes

Posted on 19th July 2009 in Real Estate

Central San Diego Real Estate Market – Mid Year Snapshot of Median Prices (2006) – Single Family Homes

As of this writing, the San Diego real estate markets appears to have shifted from one that favors sellers to one that favors buyers. However, this premise may not hold true for all communities within San Diego, as median prices for some communities continue to rise while others fall.

While there are many metrics to evaluate the real estate pricing trends of a community, one commonly used parameter is to evaluate the median price of homes from one point in time against a prior point of time. The median price reflects the point at which half the homes are above a particular price point, and half the homes are below a particular price point. The median price metric provides one method to analyze the direction of home prices, but should not be used as the sole source of data from which to form conclusions.

The data below is a comparison of median prices for various communities in central San Diego County, comparing data from June 2005 against data for June 2006. This information is only one metric at a particular point in time, and other metrics or data from future months may support or dispute the pricing trends noted below. For some of the San Diego communities presented below, very few homes sold during June 2006, which diminishes the usefulness of the median price metric.

COMMUNITIES WITH INCREASES IN MEDIAN PRICE – SINGLE FAMILY HOMES – JUNE 2006

The data below pertains only to the sales of single-family homes, and does not include condominiums or townhomes. The data is organized by the magnitude of change in median price, with the highest change in median price presented first.

For the Coronado real estate market, the median price was $1,775,000, which represents a 14.7% increase from the same time last year. Approximately 15 homes sold in June 2006 (21 homes sold in June 2005).

For the Point Loma real estate market, the median price was $1,024,068, which represents an 11.4% increase from the same time last year. Approximately 20 homes sold in June 2006 (14 homes sold in June 2005).

For the University City (UTC) real estate market, the median price was $780,000, which represents a 10.6% increase from the same time last year. Approximately 5 homes sold in June 2006 (19 homes sold in June 2005).

For the La Jolla real estate market, the median price was $1,692,500, which represents a 10.3% increase from the same time last year. Approximately 28 homes sold in June 2006 (38 homes sold in June 2005).

For the Logan Heights real estate market, the median price was $425,000, which represents a 7.6% increase from the same time last year. Approximately 13 homes sold in June 2006 (14 homes sold in June 2005).

For the Paradise Hills real estate market, the median price was $507,500, which represents a 5.7% increase from the same time last year. Approximately 8 homes sold in June 2006 (16 homes sold in June 2005).

For the Mission Hills real estate market, the median price was $927,500, which represents a 3.1% increase from the same time last year. Approximately 11 homes sold in June 2006 (12 homes sold in June 2005).

For the Scripps Ranch (Scripps Miramar) real estate market, the median price was $759,250, which represents a 2.8% increase from the same time last year. Approximately 34 homes sold this month (43 homes sold in June 2005).

For the San Carlos real estate market, the median price was $563,000, which represents a 2.4% increase from the same time last year. Approximately 12 homes sold in June 2006 (16 homes sold in June 2005).

For the Del Cerro real estate market, the median price was $557,500, which represents a 2.1% increase from the same time last year. Approximately 13 homes sold in June 2006 (30 homes sold in June 2005).

For the Normal Heights real estate market, the median price was $676,250, which represents a 1.7% increase from the same time last year. Approximately 20 homes sold in June 2006 (19 homes sold in June 2005).

COMMUNITIES WITH DECREASES IN MEDIAN PRICE – SINGLE FAMILY HOMES – JUNE 2006

The data below pertains only to the sales of single-family homes, and does not include condominiums or townhomes. The data is organized by the magnitude of change in median price, with the highest change in median price presented first.

For the Old Town real estate market, the median price was $580,000, which was a 19.1% decline from the same time last year. Approximately 5 homes sold in June 2006 (14 homes sold in June 2005).

For the Golden Hill real estate market, the median price was $451,000, which was a 16.4% decline from the same time last year. Approximately 10 homes sold in June 2006 (13 homes sold in June 2005).

For the Pacific Beach real estate market, the median price was $851,960, which represents a 14.8% decline from the same time last year. Approximately 15 homes sold in June 2006 (19 homes sold in June 2005).

For the Tierrasanta real estate market, the median price was $570,000, which represents a 12.6% decline from the same time last year. Approximately 9 homes sold in June 2006 (17 homes sold in June 2005).

For the North Park real estate market, the median price was $560,000, which represents a 9.7% decline from the same time last year. Approximately 31 homes sold in June 2006 (16 homes sold in June 2005).

For the College Grove real estate market, the median price was $475,000, which represents a 5.9% decline from the same time last year. Approximately 38 homes sold in June 2006 (40 homes sold in June 2005).

For the City Heights real estate market, the median price was $390,00, which represents a 5.3% decline from the same time last year. Approximately 17 homes sold in June 2006 (30 homes sold in June 2005).

For the Mira Mesa real estate market, the median price was $510,000, which represents a 4.7% decline from the same time last year. Approximately 45 homes sold in June 2006 (47 homes sold in June 2005).

For the Linda Vista real estate market, the median price was $510,000, which represents a 4.2% decline from the same time last year. Approximately 16 homes sold in June 2006 (17 homes sold in June 2005).

For the Mission Valley real estate market, the median price was $510,000, which represents a 3.8% decline from the same time last year. Approximately 7 homes sold in June 2006 (18 homes sold in June 2005).

For the Encanto real estate market, the median price was $435,000, which represents a 3.3% decline from the same time last year. Approximately 36 homes sold in June 2006 (47 homes sold in June 2005).

For the Clairemont real estate market, the median price was $555,000, which represents a 2.6% decline from the same time last year. Approximately 30 homes sold in June 2006 (34 homes sold in June 2005).

For the Sorrento Valley real estate market, the median price was $861,000, which represents a 1% decline from the same time last year. Approximately 6 homes sold in June 2006 (5 homes sold in June 2005).

ADVISORY

Homebuyers and home sellers should keep in mind that the data above is simply a snapshot in time, and is not conclusive of the pricing trends for any community. For some communities presented above, very few homes were sold during June 2006, which makes the use of the median price metric of limited value. The data must be evaluated over a longer duration, and involve multiple metrics to fully understand enduring market trends. Contact your Realtor to obtain information about enduring market trends for any given community.

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