Sun and stability attract investors to the Algarve

Buyers can rely on the weather - and the market - in Portugal.  DIARMAID CONDONlooks at a range of properties for sale, from fractional homes to a retirement village

THE ALGARVE in Portugal doesn’t need much introduction, which probably explains why it remains a popular area for Irish property purchasers. It is essentially the closest destination that offers that which Ireland can’t – regular reliable sunshine.

It is also remarkably accessible: Faro is served by virtually every airport in the country with a plethora of year round chartered and scheduled flights. At 2.5 hours, the flights are very bearable and, with appropriate planning, getting there can be achieved very reasonably.

Its market has always been considered far more sane and stable than its rather volatile Iberian sibling. Although purchases have dwindled, as they have everywhere, property prices have not plummeted as they have in Spain.

It has been said that there is an element of elitism among Portuguese property buyers that you don’t get in Spain. Certainly Portugal brings an altogether more serene character, an old reliable, you could say – and in already turbulent times such reliability is quite sought after.

It has also forged a reputation for high build quality, an advantage that shouldn’t be underestimated.

Of course, this all means that, if you’re on the hunt for a bargain, then Portugal isn’t really going to offer as much choice as other areas.

Yes, if you venture into the countryside, you can find a bargain, but if, like the vast majority of overseas buyers, you are looking for access to sun, sea, sand and nearby amenities then you’ll have to pay a premium.

Oceanico has established a strong presence in this market. Established in 2000 by Irishman Gerry Fagan, the company initially focused on developing luxury beach resorts in Lagos and Praia da Luz. It has expanded rapidly and now has three fully completed resorts with two completing later this year. In 2004 it moved into the development of golf resorts and currently has three projects under construction in Portugal.

The company’s latest high-end offering is a fractional product – with added lifestyle extras on offer. Fractional is a means of selling freehold property where title to the property is divided into fractions and sold to different buyers rather than as a whole to a single buyer. The fractions in question can be anything from a half upwards, but are usually quarters, eighths or twelfths.

A fractional purchase in one of Oceanico’s new five-star developments at Amendoeira (Silves, golf) and Belmar (Lagos, beach) entitles you to some extras which a straight property purchase would not offer. As well as access to Oceanico’s seven Algarvian golf courses, the package entitles the buyer to limousine transfers and use of the Prestige yacht, which is moored in Lagos port.

According to Oceanico, this is a two-part concept involving an eighth share in a turnkey property along with membership of the “Residence Club”. This part of the offering is what provides the extra amenities and services you would typically expect from a five-star resort but would not normally get with a standalone purchase.

It also offers the ability to access these services across a range of properties in a variety of locations. Rather than owners having clear and fixed dates when they can use their property, they are provided with a combination of four weeks pre-planned occupancy along with unlimited “space available” occupancy.

This, says the company, effectively means that owners can use their property at their “home club” whenever they want – subject to reservation policies and availability.

All golf resort properties come with golf title to the “home club” course included in the purchase price, but as an owner you will also have access to play on any of the company’s growing selection of courses worldwide.

As well as three resorts in the Algarve there are now two Oceanico resorts in the US, one in Canada and one here, Waterford Castle, in the south-east. There are also plans for further resorts in Lisbon, the US, South Africa, the Caribbean and Dubai.

Prices start at €175,000 per eighth share for a three-bedroom villa at Amendoeira and from €90,000 for one-eighth of a two-bedroom apartment in Belmar. Prices include property tax and company set-up fees.

Another company, Algarve Property Ireland, is currently offering a 20 per cent discount on the list price in Mar da Luz, a luxury complex of 43 two-bedroom apartments located in the resort of Porto Dona Maria. The resort, which is within waking distance of the villages of Luz and Burgau, is approximately 60km from Faro airport and is situated right on the coast with panoramic views of the Atlantic. The resort is well known to Portuguese buyers, with a number of high profile politicians owning villas there.

The development is fully complete with 10 apartments currently available. These come with either a private pool and garden or a substantial roof terrace.

After discount, prices range from €263,750 for a 92.6sq m (997sq ft) two-bedroom first floor apartment (with a 29.52sq m/318sq ft) roof terrace) to €349,450 for a 94.75sq m (1,020sq ft) ground floor two-bedroom apartment with a 555sq m (5,974sq ft) garden and pool.

Prices include a full professional turnkey furniture and appliance package, parking, storage and pools in the gardens of ground floor apartments. Kitchens have AEG stainless steel appliances. There is air conditioning and underfloor heating in all properties.

The company is offering a deal with a two-year rental guarantee and mortgages of up to 80 per cent of the original list price.

Owners can use the properties for four weeks and letting agreements are available with Seasons Holidays for those who wish to let their properties.

Also for sale is The Savannahs Retirement Village which is being built just outside Quinta de Lago and Vale de Lobo, close to Faro airport. It will comprise over 350 dwellings specially designed for the over-55s.

Here you can invest in freehold townhouses or apartments in a community offering care and medical facilities, as well as other amenities.

The village will have a spectacular clubhouse with indoor and outdoor pools, restaurants and bars, social rooms, sporting and leisure activities and a business centre.

There will be a small piazza with bars, an Italian restaurant, an optician, pharmacy, banking facilities, newsagent, flower shop and boutique available to the public.

Prices start at €250,000 for a one-bedroom apartment and from €495,000 for the townhouses. Fractional ownership is possible, as well as purchase as an investment through pension.

Oceanico

01 6177967 www.oceanicoresidenceclub.com

Algarve Property Ireland

01 6405364 www.algarveproperty.ie

Savannahs

00351 289 358 726 www.savannahs.info

Diarmaid Condon is an independent overseas property consultant

COST OF BUYING

NON-RESIDENTS can purchase property relatively easily in Portugal, even without the assistance of a solicitor, but it's not advised. Hiring an independent solicitor is highly recommended.

This legal representative will ensure access to clear title, check the property description, ratify payment terms, outline contractual issues, etc. It is also useful to have a solicitor to whom you can assign power-of-attorney so you don't have to visit Portugal to sign every legal document personally. You should also remember that Portuguese law requires that a non-resident property owner should appoint a fiscal representative to interact with the local tax authorities.

In terms of taxes, you'll have to allow for property transfer tax (IMT – up to 6 per cent depending on price) and stamp duty (0.8 per cent) as well as notary (approx. €250), registration (€250 to €500) and solicitor's fees (1–2 per cent).

Annually you'll have to pay property tax (IMI) from 0.2 to 0.5 per cent of the property value. Obviously, the more expensive the property, the higher the property taxes payable. These are based on a property's valor tributável (fiscal value), which is calculated using a combination of the location, market value and the standard of local services available.

Community fees in resort properties are also based on the size, and thus value, of a property. High end developments will consequently have higher annual maintenance fees. In general a property valued at €150k (if you can find one) will involve extra purchase costs of about 5 per cent, for a €1.3m property that will rise to around 7 per cent.