At a time of increasing uncertainty in other types of investments, real estate purchase around the world has noted a rise in demand as clients choose to invest in the stability of hard assets. The property market currently wields a strong buying power, with prices reaching record breaking levels, specifically for home buyers looking to invest in “Blue Chip” luxury real estate. The area of the Golden Triangle, in the Algarve, has long been seen as a “Blue Chip” investment, constantly delivering with its financial stability and a promising record of profitable returns.
Although we are beginning to note a struggling financial scenario world-wide, with inflation reaching levels unseen in the last four decades, an unpredictable stock and bonds market, weakened currencies and an overall housing cool down, luxury real estate has been pointed as a strong investment by various finance experts.
Not only has real estate in certain “Blue-Chip” areas always been seen as a good addition to hard asset portfolios, this current wave of economic uncertainty could present opportunistic buys for HNWIs, who similarly seek a safeguard against inflation.
Cherish And Benefit From Your Investment In Luxury Real Estate
When speaking to different colleagues from luxury agencies around the world a common theme arose, where clients are noting a recession risk, however are confident to move money into hard assets, particularly those that can be enjoyed. This has been observed in mid, high and luxury markets where buyers seek more space, practicality, privacy and essentially an asset that can be enjoyed today.
The appetite for real estate noted in the past couple of years has rarely, if ever been seen and with inventory becoming growingly scarce and prices soaring, many investors have chosen to take their money into “Blue-Chip” markets. Experts have suggested that in the coming years the market will tilt towards high end buyers, as it characteristically does in unpredictable financial climates. These are typically clients who can afford to wait out on cycles like these, and rather invest based on personal wants and needs and long-term objectives.
Volatile Market Conditions Affecting Second Home Buying
The first and biggest post-pandemic tests are being observed in second home markets, specifically with the current low inventory rates and rising inflation. Although second home markets saw the most significant run-up in pricing during and post COVID-19, it is typically one of the first sub-sectors to withdraw in signs of financial distress. Specifically, these markets can be equally dependant on the stance taken towards “Work From Home”, where the current employment circumstances are seeing companies push back, requiring many employees to return to their in-office jobs.
Low inventory has been affected by the lack in finished turn-key product as well as market dependancy on the construction sector that has been highly affected by labor shortages, supply chain issues and raw material scarcity, resulting in an extremely slow product turnaround. Crucially for HNWIs this has resulted in the loss of a very precious and immeasurable asset - time.
Waterfront Sanctuaries Are An Affordable Luxury In The Algarve Coast
In the past couple of years, pandemic-fuelled migration saw a big rise in luxury buyers looking for a new home in various regions around the world. Clients want to experience life as much as possible, to build on their life memories and hard assets like luxury real estate are delivering just that.
Here, in the Algarve, Portugal, this pattern was no different. Although not seen as a new “Blue-Chip” hotspot, it certainly became very popular for investors looking to move away from big crowded cities, offering the same however much more affordable lifestyle when compared to places such as the French Riviera or Costa del Sol. This has been highlighted by the Portuguese national authorities, who estimate that 70% of homebuyers in the Algarve have come from abroad, particularly Britain and America.
Specifically HNWIs who choose to invest in the areas of Quinta do Lago and Vale do Lobo, see an opportunity to enjoy their home through different economic upheavals, with the certainty that this hard asset investment will deliver on its returns. Buying a home in the Golden Triangle promises on “marquee assets”, a home with beach, lake and sea views, where a buyer can park their cash, enjoy and profit from their investment.