Coronavirus – A turning point or a pause for thought?
Stuck at home or safe at home? Stagnation or peace and quiet? Distant or connected? The way that each of has reacted to the Coronavirus crisis is potentially shaping our ‘new normal world’ before our very eyes.
Families and friends are reconnecting in the virtual world. Time spent commuting is being repurposed into productive thinking space, and teams across the world are reaching out to customers to refocus on business relationships and overcome economic challenges.
What we’re seeing here in Portugal is a new sense of community, a refreshed resourcefulness and a genuine outpouring of support for our country and the Algarve from thousands of people from around the world. In these uncertain days, little things are incredibly precious and heart-warming: it’s truly wonderful to hear from our valued clients and friends.
In almost forty years of trading, we’ve been through many crisis, but few match the scale of what we’re seeing now. Whilst many commentators see a repeat of the 2008 credit crisis aftermath, we see things a little differently.
In reality, there are a few similarities – consumer confidence has fallen, world economies are in shock and the potential pool of property purchasers has temporarily shrunk. This being said, the Portuguese property market, the wider economy and the Government’s handling of the Coronavirus crisis have all led to votes of confidence from across Europe and beyond.
As a country of around 10.2m people, the current crisis is affecting each of us personally. The loss of lives touches us all, and with our cities, towns and resorts all in silence, there is a stillness here which few of us have experienced before.
We believe the crisis has provided a much-needed pause in the property market. It has removed the sense of overheating in some areas and will likely allow more Portuguese purchasers to return to the market. Another key difference is that the banks and their lending systems are far more resilient than they were in 2008 – so buyers looking for home loans are still able to access inexpensive funding for quality properties in the Algarve.
Our main reason for market confidence is demand and supply. Before 2008, the market was buoyant and many properties were on the market – leading to a glut of unsold properties when the downturn came, placing downward pressure on price.
As we entered this crisis, the supply of properties for sale were at some of the lowest levels ever seen and completions were well ahead of any winter period on record. This equates to a market where demand will significantly outstrip supply – even if the pool of confident and motivated buyers has reduced for now. Spirits have also been buoyed by some recent global surveys relating to Portugal. In a recent article by Forbes, the Algarve is seen as the number one choice for overseas purchasers. Combine this with the Global Peace Index ranking Portugal as the third most peaceful nation in the world, we believe that Portugal is in a great position to swiftly recover from the crisis.
We realise that the new world will look very different to what we left behind in early March, but hope that this terrible shock has allowed most of us to reflect on what’s good and what we need to cherish.
During the lockdown period, Ana and I have spoken to many existing vendors, whilst the team have contacted hundreds of potential purchasers - with many looking forward to continuing their buying journey as soon as international lockdowns are lifted.
We believe that the dream of living in safe country with a mild climate, combined with a friendly resident population and quality properties in wonderful locations will still bring many buyers to the Algarve – and for many, a more permanent change of life could be on the cards very soon.
Wherever you are reading this, we wish you health and happiness and look forward to hearing from you all soon.
Allan, Robert, Ana and all the Cerro Novo team