At a time like this when the true terrible state of the US economy has been revealed with the state takeover of Freddie Mac and Fannie Mae, who’s still profiting from property? And I don’t just mean in America, because banks around the world have lent money and done deals with the 2 US mega-mortgage companies and undermined their own national property markets as a result.
Whilst the whole world has a focus on America, Britain and the likes of Spain where the word recession is probably falsely being bandied about instead of the word depression, (who wants to face that prospect!), what about countries like Portugal where little national news is being reported about the state of the housing market. Who, if anyone, is profiting from property in Portugal?
A quick look at the expat forums where would be buyers of property in Portugal chat away to those who have already made the move into the market, and one can see that whilst contributors’ strong opinions may be being tempered by a desire not to wipe thousands off the value of their own homes in Portugal, the general consensus of opinion is that the market has slowed to the point that estate agencies are laying off staff and those who want to sell are wiping thousands off their asking price.
So, let’s ask the question again – who’s profiting from property in Portugal? Us Brits – that’s who! Or rather, those Britons who already own homes in Portugal and who are now attempting to sell them, because they can suddenly cash in on the crashing pound! Over the past year to date the pound has falling a whopping 16% against the euro and it hit an all time low of EUR 1.23 last week which means anyone who is able to convert their euros into pounds could be set to profit as a result.
What this means for anyone with a home in the likes of Portugal, France or Spain which they are now selling, is that they will effectively be getting more for their property once it is sold and they convert the equity cash into sterling! So, if you want to profit from your house in the Algarve or your apartment on the Silver Coast, pop it on the market and sit back and watch it sell. According to some analysts and a report in yesterday’s Sunday Times, the bad times aren’t yet over for the pound either. The ST report quotes Gary Dugan from Merrill Lynch as saying: “our currency is collapsing…” – not altogether good news, but it does mean that if you have a property somewhere in the eurozone and you sell it, you will reap financial dividends thanks to the dire state of the British pound.
Of course, the whole financial mess that we find ourselves in as a planet may mean you’re going to struggle to get your Portuguese property sold, but because you’re effectively getting more for the euro value of the house in pound terms, maybe you can afford to split the difference and cut say half or a third of the extra gains off the price of the house and so undercut your competition and make your home stand out above the rest?
We’re not saying selling a home in Portugal and cashing your equity into pounds is the only potential way to profit from Portuguese property…but it’s about the only way forward that we can see at the moment!