In Madeira, developers have completed the island’s first set of purpose-built holiday homes, and two more projects are on the way.
Making these schemes possible has been huge investment in the Portuguese island’s air, road and sea connections over the past decade which have made visiting the island a good deal easier and raised its profile in the world.
Located in the Atlantic 350 miles off the west coast of Morocco, Madeira is a tourist island that has traditionally appealed to older holidaymakers from northern Europe, particularly Britain, because of its warm climate and easy pace of life. Famous visitors have included Sir Winston Churchill and Baroness Thatcher.
Tourism was given a boost earlier this decade when TAP, the Portuguese national airline, lost its monopoly on flights to the island. With the arrival of easyJet, British Airways and other operators, the number of destinations served by the airport has grown to 50. The airport has been rebuilt to cater for this increased traffic, and new motorways, bridges and tunnels created to make getting about this mountainous island a good deal easier.
Yachts sailing between Europe and the Caribbean have been restocking at a marina built at the Quinto do Lorde estate in 2002, and rumours are circulating that a new liner terminal will be created, so the harbour at Madeira’s capital, Funchal, can accommodate super-yachts.
Tight planning laws aimed at avoiding overcrowding mean the maximum height of new buildings in Funchal’s historic city centre is seven floors, although this is stretched to twelve in exceptional cases. In the countryside it is three floors. A new hotel can be built on the island only if it has at least four stars.
In addition to Madeira’s two existing golf courses, two more will be created on the island and a third on the smaller, outlying island of Porto Santo.
These moves are consolidating Madeira’s high-end tourism business and have encouraged hoteliers to build its first two designer hotels, The Vine Hotel and the Choupana Hills Resort and Spa.
Following hot on their heels are developers specialising in the construction of purpose-built holiday homes. At newly completed Palheiro Village, high in the hills above Funchal, are 48 villas and 37 apartments painted in warm reds, pinks, yellows and oranges.
Half of Palheiro Village’s homes have been sold, 70 per cent to British and Irish buyers, most of the rest to other Europeans. Prices for freehold homes range from euro325,000 to euro1.8 million, and fractional ownership options start at euro120,000 for a quarter share of a one bed-apartment. Most properties have terraces and some have pools. Village facilities include a communal swimming pool.
The village is located on the lower slopes of the Palheiro Estate where residents have access to a modern spa at hotel, Casa Velha do Palheiro, and an 18-hole golf course.
Two more upmarket, holiday home developments are on the way. Sixty contemporary-looking villas and 112 apartments are scheduled for completion at Azulara, west of Funchal, in late 2012. Prices for apartments start at Euro281,000. Early buyers have come from as far afield as Barbados and the Middle East. At Quinta do Lorde, 127 traditional-style dwellings are under construction.
The completion of the Palheiro Village is significant for Madeira’s tourism industry and property market, Anne Marchington, sales manager at Palheiro Village, believes.
“Madeira can be seen as “a late starter” for this type of resort development compared to the Algarve in mainland Portugal, and islands such as Mallorca,” she says, “but with necessary conditions all now in place, the development of residential tourism on a small scale and aiming for the high-quality end of the market, is likely to become well-established.”
The global economic downturn has been cruel to Madeira. No sooner had its spanking new roads, hotels and holiday homes been built, then tourist numbers were decimated by the credit crunch – the British have found Madeira, which is part of the Eurozone, a little expensive since Sterling plummeted on international currency exchanges last year. Combined with an oversupply of homes in some parts of Funchal, this has been bad news for property prices.
Tony de Nobrega, proprietor of Funchal estate agency, Nobrega Realty, said prices had dropped 30 per cent for ordinary residential property over the past 12 months and demand for holiday homes had “decreased substantially”.
He considers it unlikely an upturn will happen any time soon.
“I think 12 months is too soon to forecast even if any positive improvement in the world economy takes place,” he says, “it will still take time to filter into the local market.”
Even so, despite these cyclical problems, Madeira’s structural improvements bode well for its property market in the longer term. Now, could be exactly the right time to buy on the island.
(All The World’s a Home : Global Property News)