Eight new five-star hotels are set to be opened this year in the Algarve, which currently has 15 five-star units, representing a global investment of more than €500 million.

According to regional entities, two of the new hotels are taking shape in Lagos and two more will be launched in Albufeira with others opening in Lagoa, Portimão, Olhão and Loulé. In Loulé it has been confirmed that the new-arrival will be the Conrad Algarve Palácio da Quinta, which is effectively categorized as a ‘six-star’ hotel.

Elidérico Viegas, head of the Algarve’s main tourism association AHETA (Regional Algarve Hotel and Tourist Resort Association), said that the hotels would “bring more balance to the region as well as making it more competitive”.

Portugals economy remains largely unaffected by the seemingly passing crisis.

It has however hit builders hard and prices of high quality real estate in Portugal have become very cheap if you know who to talk to and are buying in quantity.

Secondary locations have been hit the hardest, between the €500,000-€1,000,000 value bracket.

Unique properties at the high end have still got the ‘pulling power’ to charge premiums if the property is unique and finished to a high standard.

Beachfront properties that have unique locations or finishes are always at a premium and always create strong demand.

The €100,000-€150,000 price bracket for beachfront properties have the the strongest pull based on a) location and b) price.

Portugal tempts purchasers away from Spain, according to reports on one property portal. BuyAssociation has claimed that the Portuguese government are likely to reap the rewards of tight planning regulations it had in place during the economic downturn and entice buyers to the country.

The portal points to the Algarve as a popular destination for potential investors and after a two per cent rise in prices over the course of 2009, it could be a favourite destination.

“This year, Algarve property is expected to continue to rise steadily, enticing the traditional Spanish villa investor to turn to the country’s neighbour instead,” the website predicts.

“With its gorgeous beaches, golf courses and sunny climate, overseas investors see the long-term potential for returns on purchasing Algarve property.”

Furthermore, BuyAssociation claim that the region is likely to see a surge of tourism in 2010.

The European commission recently said that Portugal’s economy will fare better in 2010 than previously believed, with growth of 0.3 per cent expected.

In what will be an investment of around €1.3 million, Portimão council’s Sporting Pavilion will be undergoing a complete overhaul to modernise and increase its area.

 The façade and the interior of the building will be going through big changes, with several activity rooms and backup services being built around the main area. The main sport arena will have four changing rooms, four other sport rooms having six changing rooms, four public bathrooms and one for referees, two service areas and a secretarial office.

There will be seating for 325 people, of which fourteen are for handicapped people. The current roof will be removed and replaced providing better sound and heat insulation, and better lighting.

The renovations will last ten months and will be in line with the future ‘Urban Park’ project, to be located in the centre of Portimão, which will have several public services integrated into a 5 hectare area of green spaces.

Ryanair has announced that it would open its 39th base at Faro, Portugal, in March 2010 with 6 based aircraft and 14 new routes (28 in total). 

Ryanair will create over 300 direct jobs and offer over 200 weekly flights to/from Faro in an investment of over $400 million in the airport…

Ryanair’s 14 new routes from Faro to Billund, Birmingham, Derry, Eindhoven, Kerry, Knock, Madrid, Marseille, Maastricht, Milan (Bergamo), Oslo (Rygge), Paris (Beauvais) and Stockholm (Skavsta) will increase Ryanair’s traffic at Faro to 1.3million p.a. which will sustain 1,300 well paid local jobs in the region.

Ryanair’s Michael O’Leary said, “Ryanair is delighted to announce Faro as our 39th base with 14 new routes from next March. With a total of 28 low fare routes from Faro next summer Portuguese consumers and visitors can beat the recession by choosing Ryanair’s lowest fares and our no fuel surcharge guarantee on 28 exciting destinations all over Europe including France, Italy and Germany among others. Ryanair’s 1.3m passengers p.a. will sustain 1,300 jobs locally at Faro Airport.”

Belmont Property Partners have already seen great rental demand for their properties in 2010 with over 20 enquiries taken on the first day of the year through our sister company Belmont GO.

Portugal has replaced Spain as the place for UK investors to buy property, it has been claimed.

Investment consultancy Property Frontiers made the suggestion after many agents reported an increase in activity and sales in the country during the second half of 2009. It cited the growing economy and rising house prices as the reasons many people are making the switch, alongside a realisation from some that “Spain’s property boom had turned to bust”.

Belmont Property Partners believe, Portugal represents a safer opportunity out of the two markets and as such it is no surprise that many investors are moving to the neighbouring country. It is by far the least risky of the two markets, and if there is one thing the current buyer is that is risk averse. Those who would normally choose Spain are now looking at Portugal.

The European Commission has predicted that Portugal’s economy will grow in 2010.

Three national tourism awards, Prémios Turismo de Portugal, have been received by the Algarve at this year’s ceremony, which took place at the Lisbon tourism fair (BTL) on January 13.

Estoi’s newly refurbished guesthouse, Pousada do Palácio de Estoi, won the ‘special tourism prize’. The guesthouse, which cost around 15 million euros to refurbish, aims to preserve the regional heritage with its romantic and eclectic architecture. The award for ‘new private project’ went to the Hotel Tivoli Victoria, a Vilamoura-based five-star luxury hotel, which opened last year and is situated on the Oceânico Victoria golf course where the annual Portugal Masters is held.

Portimão museum was honoured in the category of ‘new public project’, but the actual award went to the Portas do Mar development from Ponta Delgada, Azores.

In a statement, Portimão Câmara said that the honorary mention of the former fish canning factory, inaugurated as a municipal museum in May 2008 following a 10 million euro refurbishment, highlighted its “worth to preserve the council’s heritage and was a contribution to the city’s cultural diversity”. The implementation of an environmental management system and EcoResort, promoted by Robinson Hotels Portugal in Vila Real de Santo António in the eastern Algarve, won the award in the ‘environmental sustainability’ category. As well as the three awards given to tourism facilities in the Algarve, a further five were presented at the ceremony which was attended by the Secretary of State for Tourism, Bernardo Trindade.

Five-star Viseu-based Hotel de Charme Casa da Ínsua won the award in the category of ‘refurbishment of a private project’, while Rota do Românico do Vale do Sousa, in Lousada, northern Portugal, received the accolade in the category of ‘refurbishment of a public project’. Portuguese airline TAP’s monthly magazine entitled UP – Ouse Sonhar Mais Alto (dare to dream higher) won in the ‘services’ category, while the Rip Curl Pro Search 2009 event won in the ‘events’ category.

Around 80 Portuguese developers gathered at the Lisbon Marriot on 26th November to debate the ‘crisis’ facing its second homes industry at a dedicated conference organised by residential tourism and marketing consultancy Viva In.

Several panels through the day debated topics ranging from the ‘changing paradigm within the real estate sector’ to understanding the buyer mentalities of the Brits, Scandinavians and Germans. The focus of the conference was to assess prospects for international sales and what developers can do to drive activity.

Addressing developers and their product, Carlos Moedas, managing partner at Crimson Investment Management, said: “It used to be about location, location, location; it’s now about differentiation, differentiation, differentiation.” This not only applies to product, he said, as Portugal needs to compete for those looking for international investors.

The push for Portugal’s real estate industry to do more to promote ‘brand Portugal’ continues, with residential tourism specialists like Viva In and ILM supported by Sven Kallstrom, chairman of Scandinavian property exhibition company Fair Media International, in a call to take the destination to the buyer. “We finally managed to get an Algarve pavilion at one of our shows,” he said. “But it should have been a Portugal pavilion.”

This point was echoed by Ricki Osterthun, head of finance at Engel & Volkers Resorts, who offered insights into the German buyer market. “Germans don’t know much about Portugal and they see it as a poor country,” he said. “They know it for Albufeira’s mass tourism market, but don’t know enough about the luxury end. They need to be educated because they have a lot of choice.”

Prune the green shoots for future growth
The big debate was about the general resistance to discounting and a stalemate between vendors and buyers. “Most developers won’t discount and many don’t need to,” said Simon Perks, deputy general manager of bank Santander Totta. “Portugal is much smaller than Spain and it needs to maintain its sense of quality.”

However, even Perks was forced to admit that the stalemate couldn’t go on forever. “A lot of developers are trying too hard to control costs, so they’re not moving forward. They need to speculate to accumulate.”

A less generous Ian Clayton, Sales Manager Europe of HMC Funding, told OPP that Portugal’s developers ‘seem happy to keep polishing the product and resigning themselves to another bad year’ instead of focusing on better sales and marketing and adapting their product.

“We’ve seen developers in Turkey and Spain selling out this year – many upgrading timeshare clients to fractional,” he observed. “It’s not happening in Portugal because they’re just not changing what they sell and the way they sell it.”

Due to Belmont’s relationship with developers and expertise in structuring real estate investments we have been able to sell over €50 million worth of real estate with average discounts of 35% to current market value and offer rental guarantees on all properties.  We have a current pipe line of over €100 million worth of property we are looking to close on in 2010.

With news this week that Spain and France have agreed to form a company to build a high-speed rail line linking Madrid and Paris, it has now become a real possibility that commuters could travel between London and Lisbon on a high-speed train by 2013.

A few years later, Faro will follow in being linked with the British capital.

Service on the line between Paris and Madrid is expected to start in 2012 and will cut travelling to Spain by rail to a day trip for Londoners.  The Eurostar from London to Paris can take as little as 2 hours and 15 minutes. By 2013, as revealed in October by The Portugal News, Lisbon and Madrid will be linked by a high-speed train.

A few years later, and coming at a cost of 2.9 billion euros, the Algarve capital will be linked to major high-speed rail networks in Portugal and Spain. The journey time between Paris and Madrid is expected to be between 5 hours 30 minutes and 6 hours — depending on whether the service stops in Lyon and Barcelona, or proceeds directly from Paris to the Spanish capital.

Prime Minister José Sócrates has admitted that the building of these high-speed rail links are amongst his cabinet’s priorities, despite the current global economic crisis. The Prime Minister has repeatedly said that he would not dilute plans to invest in excess of 60 billion euros between now and 2020.

Besides the Lisbon airport, new motorways and hospitals, the Government is looking to spend in excess of ten billion euros on the high-speed rail network in Portugal. The first line, linking Lisbon with Madrid, is expected to be complete by 2013 and will come at a projected cost of €2.15 billion euros.

That same year, the rail line linking Oporto with Vigo in Spain will also be concluded, having cost the Portuguese taxpayer an additional 845 million euros. Two years later, the Lisbon-Oporto line will be finished and will also be the most important nationally, transporting an expected one million commuters a month and countless tons of merchandise between the nation’s two major metropolitan centres. This particular rail track is expected to require an investment of 4.5 billion euros.

The two new tracks contained in Government proposals, will see Aveiro in central Portugal connected with Salamanca in northern Spain (costing 2.3 billion euros), while the second will see Faro linked to Lisbon via Évora and the rest of Spain via Huelva. Estimates are that the train travelling from Faro will take under 30 minutes to reach Huelva and will have a maximum speed of 300 kilometres an hour, though it remains unclear where the train will cross the Guadiana River and what infrastructure will be used to do so.

The 200 kilometre trip to Évora will take slightly longer than would be expected, covering the distance in a ‘mediocre’ 90 minutes. The building of these two lines was first discussed at international level back in 2003 during the annual Iberian Summit, where they were agreed to in principal. They were later included in a resolution presented by the Council of Ministers in 2004, with current opposition leader Manuela Ferreira Leite, the Finance Minister at the time.

Plans and finances may be on ice, but the British dream of a ‘place in the sun’ has not thawed – despite increased anxiety about possible risks attached, according to new research from Mintel.

Mintel’s exclusive consumer research reveals that as many as 6.5 million Brits, or one in five adults, dream of buying a property as a second home abroad in the future, a level of interest unaltered since 2007. In addition, while holiday homes abroad remain a minority pursuit, the percentage of consumers implacably opposed to the idea has also fallen by 4% over the past two years.

Over the past few years there has been a surge in the use of all-inclusive accommodation and staying with friends or relatives as holidaymakers seek to cut costs and control budgets. Today, around one in 20 overseas holidays are taken by people in their own holiday homes and overseas property ownership has grown by a massive 89% since 2001 – compared to a 19% increase for second homes in the UK. Around 270,000 households in England owned homes abroad in 2007, with industry estimates pointing to around 425,000 UK-owned properties overseas.

While the number of consumers dreaming of buying a second home abroad remains the same, the consumer mood has changed. There is clear evidence that attitudes have become more cautious and consumers have become more risk-averse. Indeed, a quarter (24%) of Brits are concerned about being ‘ripped off’ or about possible legal problems, an increase of 4% since 2007. Belief in the investment value of owning a home abroad has also halved from one in five to just one in ten consumers over the past two years. Drivers include negative publicity in the media regarding illegal developments where developers did not secure building permits, ‘land grab’ problems, stories of bankrupt developers and other property ’scams’.

Tom Rees, Senior Travel Analyst at Mintel said: “It seems our love of property abroad has not diminished, and while we have seen an increase in anxieties, this does present opportunities for the industry. Hand holding, expert advice and reassurance will be sought, and those that can create trust will benefit. In particular, the big, reassuring names in both the real estate and travel sectors can build on their brand recognition, meaning that the increased number of keen-but-nervous buyers look first to them for help in negotiating the overseas property maze.”

Meanwhile, it seems when it comes to our ideal location for our place in the sun, Brits prefer to stay close to home. Eight in ten overseas second homes are in Europe, with Spain and France housing half of properties. The US is the largest second home market for Britons buying outside of Europe, with property ownership there by Brits up 880 year on year to reach 10,880 households in 2008. Coastal locations still dominate but there is a rising demand for ever more ‘authentic’ and cheaper locations.

“While Europe and the US remain favourite destinations for Brits buying abroad, currency fluctuations may encourage consumers to look further afield in the short-term. However, Spain and Portugal will lead the recovery as lifestyle buyers return to quality holiday destinations in Western Europe as consumer confidence returns.”

The Mintel research not only shows that the average age of those interested in purchasing of property abroad is now aged under 35, but also that the amount of consumers believing property abroad is ’somewhere to spend time when you are retired’ has dropped by 6% over the past two years.  As many as a quarter (26%) of 16 to 24 year olds aspire to buying a second home abroad, a number which declines rapidly by the time consumers reach 45 to 54 years old (14%) as reality bites for Britain’s older consumers.

Meanwhile, it seems the future generation of overseas property owners will also be more commercially minded, one in three potential buyers would like to rent out their property, compared with just over one in ten current owners.