PORTUGAL"Price expectations have finally adjusted to the new reality. People are finally accepting that the game has changed," says Joachim Wrang Widen, director of Christie's International Real Estate in Europe.
In Portugal's ritzy Estoril, where James Bond's "On Her Majesty's Secret Service" was filmed, the price of a two-story villa with a gym, sauna, pool and separate art studio, all near the ocean and one of the area's top golf courses, was slashed 57% to $1.3 million from its original asking price of $3 million earlier this year.
The general consensus among real-estate agents is that Portugal currently offers the best value of the four countries for second-home buyers. It offers fewer crowds than Spain and Italy; the climate is temperate year round (though the Atlantic Ocean tends to be chillier than the Mediterranean) and it hasn't seen the rampant speculative development that occurred in Spain. Plus, prices for second homes have come down in the 15% to 50% range in the last year, says S. Rajan Sahay, founder of Atlas Property Portugal. He has a listing in the Praia D'El Rey Golf & Beach Resort, where a five-bedroom villa with views of the golf course and sea is down to $1.6 million from its original $2.5 million. He says the client would take $1.3 million in cash.
Most foreign home buyers head to the Algarve along Portugal's southern coast, which has lots of golf courses and luxury resorts. In Praia da Luz, a modern, three-bedroom villa with a heated swimming pool that's 1,000 feet from the ocean is asking $1.8 million, down from $2.1 million.
There are also discounts on the Silver Coast, north of Lisbon, which is richer culturally than the Algarve. A new 4,349-square-foot villa overlooking the Atlantic that has a large swimming pool is down 28% to $1.9 million since March.
Rules for foreign property buyers are fairly straightforward, says Gonçalo Figueira, a lawyer in the international department of Neville de Rougemont & Associados, which represents foreign buyers. A purchase requires a local representative and a local tax number. There's a 6% flat tax for properties over €550,000 ($795,000) and a sliding scale below that. Before recent changes, a purchaser had to get a deed in a public notary with lots of bureaucracy; now it is possible to register for property online and get a property granted in a private document as long as it is witnessed by a lawyer. Legal fees can run about $4,000.
Maria Nunes, an information-technology executive in Monroe Township, N.J., is looking now for a house in Caldas da Rainha, a museum-filled city about an hour's drive from Lisbon, where she hopes to spend a couple months a year. "A million dollars is a mansion there," she says.