Ah, the eternal search for Utopia.
So what is the cost, exactly, of living in Paradise?
One issue that concerns me about the Algarve is the apparent difficulty in finding a year-long let in Tavira and its environs, let alone one that is reasonably priced, and by that I mean * cough * cheap.
Some (many?) rentier landlords prefer to reserve the shoulder and summer months for short-term holiday stays, often via AirBnB, which commonly has a hollowing out side effect on neighborhoods.
AirBnB has become quite popular in the Algarve as a real estate cash cow, often to the chagrin of people who live full time in buildings that turn into high-priced flop houses.
Like most Americans, we want to check out the atmosphere first and see if it suits us there.
But it might turn out to be difficult to find a suitable place in the Eastern Algarve that’s available for a full year at the right price point — before we consider parting with our home in Fla.
Despite recent claims by the IMF that the Portuguese housing market is not overvalued, it is quite obvious that it is: with housing prices in some cases increasing by 15 per cent or more per month, this trend is clearly not sustainable.
There’s already been many years of massive and often murky foreign-driven speculation, as Brexit looms, and golden passports (i.e., Portuguese nationality) being sold to the highest bidder.
Normal Portuguese buyers (except for its tiny plutocracy) have been priced out of being able to afford to live in their own country.
It’s especially acute in Lisbon, as laws are being passed to squeeze out retirees who are long past their anticipated Expiration Date, yet still enjoy 1970s-level rents in the historic districts.
The aim of gentrification in Lisbon is to “revitalize” its center and other targeted neighborhoods, such as its formerly desolate wharves.
Various incentives are used to making these attractive to foreign speculators.
An increasingly likely future scenario for Portugal by 2050 is that it turns into a doughnut hole country, with the central mountainous hinterlands bereft of population.
A few Portuguese would remain as compliant servants tending to the whims of their foreign masters who will have entirely colonized and privatized every inch of Portugal’s desirable coastline.
Meanwhile, Leftists in the Portuguese government — should the alluring Catarina Martins have her way — will attempt to squeeze as much as they can out of property-owning foreigners, while entire former sardine fishing villages are transformed into fake selfie backdrops or razed to make room for sterile condos under largely absentee ownership.
I have to decide whether or not life is indeed better, overall, in a country where English is not the national language (but is widely spoken), and which does not conform to US standards in terms of infrastructure, housing quality, cost of gas, size of cars etc and other factors.
Paramount in this is assessing the likelihood of an upcoming crash, 2008 style — if a global contraction is in the offing.
Moreover there is the environmental risk, if they start drilling for oil off the Algarve shoreline, or if the attractiveness of the Algarve declines due to massive overbuilding around the Ria Formosa, French Riviera or Costa del Sol style.
The question is this: is now the time to buy a place in the Algarve, or is it more prudent to wait for what is possibly an upcoming and possibly significant housing market correction, due to some EU meltdown?
Some other things to keep in mind.
It seems that a new rental law has just passed in Portugal.
A landlord can ask up to 5 months of deposit at the start of a rental agreement … and if rents are delayed over 1 month, a landlord can ask for an additional 20% penalty.
Some posters on the Americans living in the Algarve FB group think this will kill the long term rental market, as that’s basically like prepaying rent, and is a chunk of change to produce all at once for many — especially when what is being asked for are rents and deposits that the average Portuguese cannot afford … a country where only the well off can live well.
But old and rich UK and European pensioners are many… in fact they are eagerly coming to the Algarve in droves… flush with their indexed retirement incomes and reciprocal health insurance agreements and thus are likely to continue to elbow out those not as fortunate.
Thus, many Portuguese simply leave the country to work somewhere else, as the ever-increasing number of expats with fat pockets exacerbates the Portuguese housing crisis… a country where its own citizens can no longer afford to remain.
Another, more mundane, but still important side issue is the risk of not getting your 5 month deposit back.
I have learned, for example, that some middle-men may not always give the landlord the rent you are paying and or refuse to return a deposit at the end of a lease term.
Just imagine the stress of signing a lease in a language you do not understand!
To make this risk go away, you would have to find translators and lawyers who can attest that the lease is the same in both languages (thus adding to the cost and slowness of nailing down that rental agreement, thereby greatly increasing the likelihood that you will lose out on choice rentals in a hyper competitive rental market) in order to verify that you aren’t being rooked.
I always keep in mind the old saw that if something seems too good to be true, it probably is.
Some claim that, according to government figures, around 600,000 Portuguese live in rented properties, or about 6% of the population… which means that the overwhelming majority of renters in Portugal are foreign.
The huge increase in real estate prices that has been driven by this invasion may propel more to buy sooner than they normally would – if they have the funds to do so.
But even those who are cash rich, however, may have little interest in buying, as it ties them down to a location that they may eventually decide is not for them.
Although it is not necessary for citizenship, many expats buy for tax reasons and because they want a relatively hassle-free fast track to EU citizenship.
Once achieved, that gives owners of expensive properties (or renters who are prepared to reside in Portugal for 5 years) free access to the EU – assuming the EU will in fact survive to 2024, which I put at 50/50 — especially if hard-core nativism takes hold in enough countries, and political centrism can no longer hold down the mushy middle, and each country returns to the historical Fortress model — in which case, America, China and Russia win, and the EU is screwed like Madonna in a roomful of Portuguese rent boys.
That said, it still seems possible right now to find decent digs in or around Tavira for around 600 – 800 euros per month on a yearly rental.
I shall test this theory when my wife and I arrive in Tavira next week, and start looking around for potential digs.
Even if the Algarve does not turn out to be The Dream Paradise that’s relentlessly pimped in all the glossy real estate brochures and seedy online huckster venues, I am sure we’re going to have a great time, weather permitting (it’s boiling hot there right now, despite it being mid September already).
At the very least, Portugal is likely to compare favorably to the political, economic and social wreck that is Egypt – as I saw from my 7 month stay in El Gouna this past year, the sort of failed country whose defining characteristics were correctly predicted by the late Ahmed Khaled Towfik in his prescient novel, Utopia.
Just reading the latest lies and half truths in Al Ahram, combined with titbits about a servile Sisi, like some latter day Ismail Pasha, getting Trump on the horn out of groveling panic that the Army’s US gravy train — Egypt’s long-standing reward for selling Palestine down the river Nile — might soon come to a well-deserved end, which explains his recent sweaty visits with billionaires in Commie nations, current and ex.
Nowadays, kidnapping the children of the elite and the selling of human body parts are among the many degradations that have become normalized in the now feral land of the Pharaohs, whose fortunes are inversely related to Portugal’s, in terms of their respective ability to lure unsuspecting tourists and / or real estate speculators looking for outsized returns that will vanish forever the day the first bomb explodes in Abu Tig marina: the more screwed up and dangerous Egypt shows itself to be, the better things go for CR7’s birthplace.
The Algarve will not be as empty and starkly beautiful as it was when I visited in the summer of ’73 with my parents, but no doubt it continues to be attractive — despite the golf courses and pollution and summer overcrowding.
Stay tuned for stunning pics of our upcoming adventures to sunny Algarve, where life is lived in the slow lane — just the way I like it!