Luxury real estate Portugal and the segment confirmation difficulties
We have a unique opportunity. Today we are recognized for the best reasons and therefore sought after by many. We have several examples for foreigners with a socioeconomic level who intend to visit or reside in Portugal. But we cannot forget that Portugal has a small dimension and, therefore, you must choose the market segments where you want and should be.
In this book, we seem to be lacking in offering products of a better level, more differentiating and that, at the same time, propose in a way that, for the growth of the national economy, affects everyone. In addition to the task, there is also another aspect that is mentioned: the difficulty of differentiated projects, in the case of services as well. Award and luxury.
Let’s look at the banking case.
Today, the granting of financing for exclusive and hotel purposes, as well as the granting of a bank of determinations may require more of the project that requests an external evaluation (an external evaluation, which each bank of decisions). And these estimates, as a rule, resort to the use of “comparable”, that is, in the case of a residential property, the appraiser will look for projects under development (and for sale) or completed located in the same area and that are minimally comparable.
The problem lies here.
When you want to develop a luxury project in an area suitable for this purpose, it is extremely difficult but without external problems, a department with problems further from the risks of the banks. And so, most of the time, it turns out to be “easier” to develop and finance a little differentiated project, but at the same time smaller, a highly distinct project, perhaps simpler and with an effective risk.
Who loses? Many entities.
– The promoter is obliged to carry out a less differentiated project and, possibly, of greater risk, especially in times of demand or greater instability (if present);
– The city, presumably, will have a new or rehabilitated building, with lower quality in several areas and, of course, will charge IMT and IMI;
– The State, which will charge less taxes (Imposto Selo, IRC, etc.) and, partnership, ability to invest in public services and infrastructure;
– In general, the Country due to incapacity and high profile customers, as well as the more difficult precariousness to combat low ones;
– And, finally, the current bank, because it will finance a project and, in case of instability of the differentiated market and potential for appreciation. In this context, it is important to remember that in the current situation of instability in construction costs and the increase in interest rates, undifferentiated products are the most risky.
In other words, at the moment, they are created as conditions for Portugal not to be able to claim with a differentiated and perhaps more sustainable destination.
Portugal must… will have (!) to gradually move away from mass tourism and evolve towards quality tourism.
CEO of Vanguard Properties