The southwest is generally regarded as the property area with the highest density of top value properties with an average spend of €1 million by new investors. Regardless of what is happening outside the island the level of investment has not changed in this area and if anything it has slightly increased. Furthermore, there is little evidence of “bargains” and owners have accepted that they will have to wait longer to sell their property in the current market conditions.
According to the local director in this area over the past six months there have been only three „bargains“ , which probably represents the same number of bargains under “normal” market circumstances. Furthermore, there have been hardly any property price reductions. Generally, asking prices for prime properties in good locations are stable with well located villas achieving prices of around €2 million plus. There is overall price stablity of properties in this area and although owners are a little more flexible to accept offers there are no generous property price reductions.
Small price reductions tend to be for those properties which are not in a prime location. For example; a two bedroom apartment with no views will have reduced its price at around 7% below the original asking price with an average price of €350,000. On the other hand a well located apartment with views would cost approximately €500,000.
Probably the main effect of the global financial crisis in this area is that the market is slower and there is less demand which represents less transactions, but here this factor does not lead to lower property prices. There are many wealthy owners who simply do not need to sell and although there are less buyers looking for property the ones who are searching tend to be serious, and often cash buyers.
As available land for residential development is so scarce in this region, it still represents a good investment at around €650 m².