Portugal was at the peak of a construction boom just before the global recession hit in 2008. Vast numbers of million euro villas are being built and left vacant with numerous ex-pats moving back to their home countries. Within Portugal there are a few select places in the Algarve that seem relatively untouched by the recent economic downturn with construction still booming.
In the Golden Triangle of the Algarve, three destinations used to prosper but since the global recession not all are continuing to do well. Quinta do Lago and Vale do Lobo continue to have their successes but Almancil has been left at the wayside. Once sharing its cousins successes to a sparse and poverty stricken cidade.
Goncalo is the architect for the construction of a 72 villa complex for the wealthy in Quinta do Lago called “The Keys”. The Keys hasn’t gone without its far share of problems though. The whole project was put on hold in 2009 however the directors managed to secure funding through banks and a large construction company to continue the project.
The Keys was conceived initially with having three different plots for different lifestyles. A hotel, a family orientated complex and a rolls royce, cream of the crop complex, which is the one they’re continuing with today.
The cheapest property on The Keys is going for 2 million euros for an apartment and reaches the higher echelons of 7 million euros for the largest villas. The projected launch date of The Keys is summer 2013.
The intended ethos behind The Keys is no expense spared and is for people who just want to come away and not have to worry about anything. Everything is sorted and paid for before the customers arrival.
In between Almancil and Vale do Lobo lies an abandoned derelict shopping plaza. It never sold once it finished completion in 2008.
Miguel has run a a string of successful businesses in the Algarve and currently owns the beach bar called Marias.
“I was born one mile from here, I’m the old original guy. I’m seen this area change from agricultural tracks, sand tracks, to tarmac...i’ve seen everything here change.
We say in sport, in high competition, little details make the difference between winning and losing. Even the way you tie your shoelace, makes the difference between you winning and losing, makes a difference between if the ball goes one way of the other. In the restaurant business, in the tourism business, it’s the same. In the high competition that we have, with Dubai, with a lot of countries around the world. If we bet in quality, that quality will bring winning. Will bring victory. If we bet on average, we are closed to defeat. People come to the Algarve for the quality of service.
The recession is on the public sector. This crisis is not much different from the crisis after the two world wars, it’s a fight between the private sector and the public sector. The private sector cannot afford to pay the public sector. Because the public sector is too much of a white elephant.”
An empty billboard frame that would once hold advertisement for real estate in Almancil now sits blank with a backdrop of villas.
Joost is the Property Director of Sales in Quinta do Lago.
“I have been in the property business for quite a while. I came here in the late 80s and did the management of a small hotel very similar situations to what’s happening. There was nothing happening, really quiet and so one and started growing and so on. After the small hotel for 2 years I came here to Quinta do Lago in 1990 and at that time there was nice houses and so on but not at the level it is at now. It was a time share resort.
Portugal grew very quickly in the 80’s and it was very basic. We were in a hotel and there was electricity but the houses around there was some nice villas and they were sort of feeding off the electricity of the hotel. The rest of the houses had no electricity and they had no cars, no central heating, just a fireplace in the middle of the house and that’s it. Then in other countries you see that grow over the years, takes 30-40 years, people get electricity and they get radio and they get TV. No electricity in the 80’s. Suddenly it goes very quickly. One year they don’t have electricity and the next year electricity, 6 months later they have a television and another 3 months later they have a satellite on their roof. That’s in a time span of 18 months. Other countries it takes a long time.
Property market in the last two years especially in Quinta is existing 40 years now and before we never had to do any marketing it was here with a limited amount of space and only so many plots and we had people coming to us asking if we could buy a plot or buy a house so the market was coming to us, same with golf, we had more demand than what we could deliver here in Quinta do Lago so for us we didn’t have to do any marketing. That’s the thing that has changed now since maybe 4-5 years, now we have to go out to the people, we have to go out with offers. Sales due to the recessions have dipped of course but it’s a bit of an artificial area, it’s not comparable with real life 3KM down the road where really, portuguese people are struggling financially.
Lots of the properties here are registered in off shore companies. You’re not really buying the property but you’re buying company that owns the property and benefit there is that you don’t pay transfer tax of the properties sold. But 2 - 3 years ago suddenly the banks were more careful with their money so they’re not giving mortgages anymore for off shore companies, before you could get a mortgage for an off shore company and the house as collateral. It was no problem. So everybody who buys a house now it’s cash. So if someone buys a 3 million euro home it’s their own money.
People come far and wide to experience what the Algarve has to offer with many people still moving to Quinta do Lago and Vale do Lobo. Some purchase second homes to get away from life in countries that have worse climates. The initial draw for most people is the golf courses.
Nicola and her husband have recently bought a property in Quinta do Lago with a view to knocking down and building a property to their own specification.
“This is our first time buying in the algarve, we’ve been thinking and looking at buying every year so probably 20 years actually. Every year we come down and have a look and see what’s on the market. We came down first 13 years ago with a view to buying at Monte de Quinta on plan because they were on the market. Whilst I was here I had a look round other properties and five bedroom properties which is what we were renting with 3 children and a nanny were all in the region of 1.5 million and my husband said we can’t do that it’s ridiculous money. Year on year we’ve always looked just to see what’s been around and last year my husband said that someones found us a plot and we went and had a look at it and decided that we would buy. Absolutely crazy because the children have now left home and now we’ve decided to buy after we’ve had years and years of holiday down here every year for 13 years but now we’ve bought a villa.
Because we’ve been on holiday here every year and we like it. Works well, the weathers good and we know it. The minute you get off the plan you feel as though you’re on holiday with Faro airport being literally 10-15 minutes drive away.
We live in the country at home and I was always driving such a lot, so I didn’t want to come down here and have to drive every time I wanted to go anywhere and for us the thought of being in the hills, although you get spectacular views, everytime you wanted to go to the beach you’d have a twenty minute drive and a twenty minute drive back so it just didn’t appeal really. My boys like to play golf so they wanted to come play golf, I play golf. I just didn’t want to have to get in the car anymore to satisfy peoples needs on holiday. We wouldn’t have looked at anywhere else to buy really.
When we came to buying we thought long and hard about it and I started looking at villas rather than plots. The thought of starting it from scratch frightened me really. My husband was quite keen on the idea however and actually it’s starting to grow on me now. I think it would be quite an exciting project building our own villa. We’re thinking about doing that at the villa we’ve bought. I think if we ever went back to renting villas we wouldn’t rent an old style villa and would prefer to stay in a modern villa, if it’s used as a holiday home. Our feeling is, if we don’t want to rent an old property, why would we want to live in one? So when we found this one it was with a view to putting something else up. We bought this plot for 2 million and we can then proceed to build our own villa here to our own specification for a million or so and then the plot value will skyrocket to 3-4 million. We’d like to build a modern traditional house, not these ultra modern box houses. It’ll take 14 months to build from when we knock the villa down to completion of the new villa but will won’t knock it down till the end of the summer so we’ll get the summer out of it. If you look around here there are two or three properties that are just derelict and waiting, presumably, for somebody to buy and develop. I suppose, when you’re spending a lot of money and the new modern properties now are talking 3-4 million, it’s a lot of money. Whereas you can buy and build your own for cheaper.”
The style of properties in The Golden Triangle constantly shift in a rapid manner. There is a cliff in a properties worth and when it hits a certain age a property will stop increases in value. Many people buy plots to knock down houses and build new, modern houses to keep ahead of the curve.
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Silvia works at the Sao Laurenco condominium and is a native to the Algarve.
“Me and my family are from the Algarve and was born here. When you open the newspapers and watch the TV the only thing you can hear is about the Crisis and of course if the government are making you pay more taxes of course we all are affected. Our salaries are not very high here and if you need to pay more taxes, sometimes you cannot afford to have things that you were once used too. Some people are asking for help with food items just down the road in Loule. There is a place in the municipality where there are five families per day asking for help so it really affected us in general. Of course you still have people with money but really from tourism, mainly. We live from tourism.
Our balance from the exportations and importations, our exportations are 800 million for the tourism so it’s a lot and means a lot. In the algarve you have many families that are still living ok because the live from tourism like restaurants or from places like this but we have many companies closing now and many people going away for example like my brother who lost his job and is now going to france. He’s working in a completely different area. He used to be an IT teacher but now he is working in a restaurant but he gets four times more money than in the Algarve.
My husband’s business went down but he’s still with the business. He runs two petrol stations. One in Almancil and one in Loule. He owns the place. He also runs a small hotel in Loule. He’s been affected as people are not buying as much. He represents the fuel company Galp and runs two franchises. Galp give a few cents per litre and if people don’t go there for the petrol they lose money. Whatever the petrol costs per litre he gets the same amount no matter the price fluctuation and this is where the problems arise for his business. People buying less with rising costs means people are buying less and he is getting less money from the business. They are working for the brand.
Before the 1974 Revolution we had 40 years with a man called Salazar who was a Dictator but not as bad as in spain or other countries as we didn’t have wars. He wasn’t very aggressive. He was not and some people say he was as you couldn’t speak. You were not free to speak what you want for forty years so it was a lot. Until the 1974 revolution we had that system implemented here so we didn’t grow. We were like a poor country, he gave the image outside that we were very happy.”
The Conrad, a 5 star hotel line from the Hilton chain of hotels opened in autumn 2012 in Quinta do Lago. Much like The Keys when the bottom fell out of the market the directors of the construction nearly pulled out but were persuaded to stay on and continue construction.
The two apartment blocks either side of the hotel front were put on hold and are in the process of being sold off while the hotel is open accepting business.
The Conrad has been a very welcomed addition to Quinta do Lago as it brings new business to the area.
Bradley is a hairdresser in Portugal who runs a successful salon named Victor Picardo’s. Bradley bought and runs the franchise in Faro and has done so for 8 years. He used to run two franchises with another in Vilamoura but with the recession in 2008 he was forced to close this business and direct all attention to Faro.
The crisis means he has had to work much harder with longer hours but has also seen his franchise go from strength to strength. Because the recession has caused people to think more about where there money is going and a general decline in the frequency people having their hair cut or treated many other salons in the area who perhaps don’t give as good a service as his salons have shut down. Because of these salons closing down he is building a larger clientele base which fills in the gaps of people not having their hair cut as much. He believes that if you sell a quality product people will come.
Since the recession he has had to be more forthright with the way he sells. Before he would get a lot of passing trade but now he has to a lot more marketing to accumulate more sales and cuts. It’s not just about the haircut for his salon, it’s about the whole product, talking to the hairdresser, making the client feel wanted and wanting to come back, explaining what will look good and what products will work for their hair. This, he says is the key for surviving in the crisis. The marketing even goes as far as creating a salon experience that hasn’t been done before. He has a iPad at every chair which the client can view the internet on while their hair is being cut and every now and then a advert for the company or a product gets played. He mentions that companies can also put their own advertising on there for free at this moment in time but may charge them to do this. Necessity is the mother of invention.
The Savannahs over 55 complex lays baron in Almancil after the construction company and directors went bust shortly after the recession. When the recession hit the purse strings were tightened the Savannahs suffered greatly and the development was dropped with many losing money in the process. The Savannahs was hot gossip in The Golden Triangle before its demise and everyone wanted a piece of the pie or at least be seen too.
This derelict shell of a Mosque in Almancil was illegally erected and subsequently construction was stopped. The company responsible for the construction ran out of money to demolish it so it’s a sore constant reminder and scar in Almancil of better days.