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Now that the Article 50 of the Lisbon Treaty has been invoked by Prime Minister Theresa May, which makes Brexit official, should you be selling overseas property fast in Portugal? Believe it or not, Brexit is not necessarily a bad thing.
A lot of British expats have benefited immensely from Brexit and have used the occasion to sell overseas property quickly. Many have used the occasion to profit from the fall in value of the pound against the euro.
There is certainly a lot of money to be made by selling overseas property quick in the post-Brexit scenario. Peter Thompson, a British expat based in Portugal, recently sold his home in the Algarve region of Portugal. The Algarve is one of the most beautiful places in the world and is home to a large British expat community.
It is often compared to Costa del Sol in Spain and attracts millions of tourists every year. The Algarve is one of the prime overseas property destinations in Europe. A number of wealthy Chinese investors have sought to buy holiday villas here, as have cash-rich Russian and Brazilian individuals.
Thompson bought his second property in the Algarve in 2015 when the pound was worth 1.55 Euros. So at that point of time, British expats had tremendous buying power and took advantage of the sterling’s strength to buy properties across Europe.
Since the June 23, 2016 referendum, the value of the pound has plunged to new lows till recovering slightly to the present level of 1.17 Euro.
Thompson explains his decision to sell his home in the Algarve in an interview with Bloomberg: “We didn’t want to have two homes in Portugal. Our timing to sell was almost perfect because it allowed us to take advantage of a weaker pound.”
A number of British nationals like Thompson have taken advantage of the strength of the Euro relative to the Sterling to sell their overseas properties in Portugal and elsewhere in Europe, earn in Euros, and repatriate the proceeds to a bank account in the UK in pounds – thus earning a substantial profit over the sale.
Zoe Hawker, a real estate broker based in the Algarve explains, “British property buyer numbers began to fall after the sterling fell following the Brexit vote. The flip side was very good because the French are coming in with stronger euros and buying from agents like us who happen to have large portfolios from British sellers.”
Both buyers and sellers have taken advantage of the fluctuation between the two currencies and profited from the exchange. While Britons are largely on the selling side in Portugal, there is a huge demand for properties here from cash rich Chinese, Russian, Brazilian and Middle Eastern investors. Also buying are French retirees, who are attracted by the low taxes here in Portugal.
So a lot of British expats who have lived in Portugal for decades have sold their overseas properties here and made extraordinary profits. Most of them are likely to reinvest in Portugal and buy holiday homes here again once the value of the pound appreciates to a level that they feel comfortable with. That is already happening as the pound has been recovering the lost ground pretty fast. This is very smart, indeed.
Contact us today to buy or sell property in Portugal fast and free from stress.