Team Australia's John Martin looks ahead to upcoming A1GP race in Portugal

Team Australia lead driver John Martin talks to foxsports.com.au about the upcoming A1GP race at the new Algarve circuit in Portugal.

Martin will be looking to erase the disappointment of his last start at Kyalami, South Africa when a pit stop problem in the feature race prevented his team from capitalising on a promising position.

I hear you're travelling through Italy on your way to Portugal - will you be hopping into the simulator for the new Algarve track?

I will definitely hop into the simulator in Italy, which is a week before I head to Portugal. It will be great to put some practice laps in because the track looks pretty interesting. It’s a brand new circuit and I don't think many people have raced there yet. Only the superbikes have raced there so far and F1 and has done a bit of testing there but apart from that I think we (A1GP) will be the first major race there.

So what are your thoughts on the new track?

It’s pretty big really, fairly wide and smooth - really good. I’ve seen some footage of it on the internet and it looks really impressive. There are plenty of hills and stuff in it - different cambers and corners - I think it will be great. Should be plenty of opportunity for passing; A1 is always fast, anyway.

What have you been up to since the South African GP? There must have been some mixed emotions after the Gauteng race.

I've been great chilling out back home in Queensland and doing some training. As for the South Africa incident, we have moved on. Everyone realised what happened and it was an unfortunate ending but at least we proved we had the pace. We just have to push on for Portugal, where we have the potential to be right up the front.

Talk us through the problems you encountered in South Africa.

We qualified OK for the feature race and had a reasonably good start due to a collision between the New Zealand and Malaysian teams. I got into third quite easily and had some really good pace at that stage coming in for the first pit stop. We had an agreement with the German team before the start of the race that we were going to stop on the first available opportunity - which we did - but they decided to come in after us. I don’t know whose idea that was but when we attempted to leave the pits the German car was blocking our exit. When I hit the breaks to avoid them the anti-stall failed and the car wouldn’t start again. It was a bit of a pain, really.

What were relations like between the Australian and the German teams after that?

Obviously nobody was very happy but I don’t think there was anything said. We just took that incident on the chin and we will learn from it and move on.

Was any action taken against the Germans?

No, it was just a congested area in the pit lane - they did nothing illegal. But I thought our team had an agreement with theirs. Unfortunately, they didn’t stick with that agreement - it’s their decision I guess.

You mentioned your speed was very good until that happened. It must give you confidence for the remaining rounds.

Yes it was, and later on in the race when we put the new tyres on we held the fastest lap time for a long period of the race. It was a good genuine race-speed lap. By the end of the race we had a lot more pace than Team Switzerland (who won the race). Team Switzerland were a long way in front before we ran into trouble in the pits but I think second was definitely achievable.

What are the chances of a podium placing before the end of the season?

The ability is there; we just need to pull it all together. I want to try to improve my sprint qualifying times because I have been lacking a bit there. But we should be OK, I think. The last two rounds are great - Portugal looks like an awesome track and I know the Brands Hatch track and have raced well there. There are positive signs for the future.

Portugal Algarve New Race Track For Property Investors

The Algarve Portugal has consistently been popular with both life style property buyers and overseas property investors. It has now a new appeal with investors in the form of a brand new race track at The Autodromo International de Portima

The complex can hold a total of 150.000 spectators when fully completed. The circuit has been constructed by studying and visiting various racing circuits across the world, and was created by capturing the best features of each. The Autodromo do Algarve is a masterpiece of fun, excitement and luxury services all in one.

The Autodromo International de Portimao will be equipped to hold events across the whole motor sports spectrum, from Formula 1, Rally Sprints, GT races, Super Bikes and much more. Because of the region’s excellent weather conditions, the complex will be permanently in use. In addition to the racing track, the complex will have a karting track, car maintenance and support zones, a grandstand, VIP area, picnic area, Sport facilities and Spa, Physical treatment facilities, Restaurants, shops, museum and a hotel with further apartments.

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Is this a good time to sell your Portuguese property?

Well, if you are thinking of putting your property on the market and you are from the UK then "Yes" is the answer. A friend of mine who owns a townhouse in Pera has a neighbour who purchased his property 3 years ago for €235,000 and has just sold it for €225,000 through www.aplnet.co.uk.

Now you may be thinking "That's lost money?" Well under normal circumstances you would be right but these are not normal times as 3 years ago when the owner purchased they got an exchange rate of €1.53 to the £1 so in sterling they paid around £154,000.

Today they changed the money through FC Exchange and received just over £215,000 with an exchange rate of 1 EUR = 0.956749 GBP and the best part is that they are not eligible for Capitol Gains Tax.

So if you set your price based on Sterling you maybe on to a winner and make a profit of £61,000.

Government gets tough with banks

THE PORTUGUESE banking system has given the government short shrift after the Finance Minister ordered it to start lending or face having credit guarantees withdrawn.

Finance Minister Fernando Teixeira dos Santos, under pressure from associations representing small and medium-sized businesses (SMEs), has told the banking system that with state guarantees underpinning bank-to-bank loans, Portuguese banks can now go and borrow capital to lend on the international money markets.

But despite not making any official statements, the banks aren’t budging after the European Central Bank downgraded the value of Portuguese government backing worth two billion euros on a key loan to Caixa Geral de Depósitos to only 1.2 billion euros.

In other words, the European Central Banks don’t believe that the Portuguese state is as financially sound as it claims it is.

Back in November, the Portuguese government pledged, in line with other European Union countries, to back bank credit loans on the international market for the nations banking system to the tune of 20 billion euros.

The government now says that with such backing, there is no reason why Portuguese banks can’t start lending to their clients at reasonable market rates again.

Instead, Portuguese banks are either charging exorbitant interest rates to lend or are only lending short-term - at a rate of days, weeks or a few months rather than years.

Now, the finance minister has admitted that the government may have to re-think its system of guarantees offered to the banking system, penalising those that don’t or won’t lend.

Officially, the line from the Portuguese Banking Association is that its members are not putting the brakes on loans to small and medium companies.

But according to anonymous banking sources quoted in the daily paper, Diário de Notícias, the comments by the Finance Minister on Tuesday evening can only be interpreted as a way of “encouraging SMEs to negotiate with the banks for credit lines to supply their businesses”.

According to business associations, some banks are using the government-backed credit lines to either shore up their own balance sheets or lend only to pre-existing clients, allowing those clients to liquidate their loans and take out new ones at new, harsher rates of up to 2.5 percentage points because of the dearth in liquidity and increased risk.

Up until now, only Caixa Geral de Depósitos (CGD) has used government-backed guarantees by issuing a 1.2 billion euro bond – the most it managed to borrow from the market.

Apart from the government-owned bank, both Millennium bcp and Banco Espírito Santo (BES) have now stated the intention to use the state-backed assurance to borrow on the open market, even though neither institution has yet done so in practice.

“The Finance Minister’s threats to remove guarantees for credit will only serve to create a negative financial image of Portugal on the international money markets,” said a senior banking source.

Traditional Property for Sale in Portugal

If you think about it, the mass media hype about negative pricing adjustments in the world’s top property markets has mainly missed out Portugal. You may think that this is because Spain’s market crashes make for a far more exciting story, or the fact that London’s high-end real estate landscape is altering is more interesting perhaps – but actually, the reason why Portugal has avoided making the sensationalist headlines about falling prices and unhappy home owners is because its market remains far more stable and well adjusted.

Of course, that’s not to say that the property market is over-flowing with buyers or that there is more affordability globally speaking for properties in Portugal! But Portugal’s has remained a much more stable and realistic property market over the last decade of record gains in other parts of the world. Taking the over blown Algarve out of the equation for a minute, the appeal of Portugal has been far less attractive to the get rich quick investors, rather it is a nation that more strongly appeals to lifestyle buyers and long-term investors.

If you fall into either of these categories you may be interested to learn that there is still very strong demand for traditional property for sale in Portugal, and that it is a nation that can fuel this desire with stunning homes for sale all across the country at relatively reasonable cost.

Apart from on the Algarve where golf courses and sophisticated communities have forced prices up to dizzying heights, the rest of Portugal has enjoyed modest, healthy and sustainable growth in property price terms over the past decade. This means that the market remains robust, it is unlikely to crash like pockets of over-priced Spain, and at the same time, it is home to some fabulous ‘bargains’ in relative terms. There are traditional properties for sale in Portugal if you venture off the beaten track, these homes are often as attractive as rural fincas in Spain or ruined farmhouses in Tuscany, but they are for sale at half the price!

When one thinks of buying property in Portugal one immediately and almost only ever thinks of the Algarve – but move away from this over priced region and further from the airport and you will find some stunning bargains. One developer has finally realised that Brits in particular want authentic, traditional homes in Portugal, where they can feel at one with the nation, its history and culture. This developer has taken on an entire ruined village and is slowly but surely restoring each of the 52 abandoned homes to their former glory. As the restoration work continues, mod cons and sophisticated lifestyle luxuries are added – yet without taking away from the authentic feel of the houses!

The village is called Póvoa Dão, it’s located in the wine growing region of Dão with the nearest city being Viseu; it’s accessible via Porto’s international airport, which is an hour’s drive away, and to get to the rural and rustic village you have to navigate narrow roads and wind your way through stunning countryside to get to it. The site of the village dates back 700 years, and local stone and timber has been used in the reconstruction of each stone cottage on this incredibly stunning development.

Properties for sale within the development start from just EUR 165,000 – and if you want the best of all worlds, there’s even an international golf course within a short driving distance! For others who want the challenge of restoring their own traditional property in Portugal, try the Monchique Hills for example – recently highlighted in an article in the Telegraph about getting off the beaten track when seeking authentic property for sale in Portugal. The Algarve’s sophistication is within reach, but if you head for the hills you escape the high prices and may well find a bargain home for sale upon which you can put your own individual stamp!

The good thing about Portugal is that it is a long way off running out of rural properties for sale requiring restoration! Unlike in parts of Italy, Spain and France where the Brits in particular have bought out the market, Portugal is a nation still lesser explored when it comes to going off the beaten track. Therefore, if you’re not put off by the thought of learning Portuguese and you want a traditional yet affordable home in a country where the cost of living is low, the standard of living is high and the climate is far more attractive than in the UK for example, head for Portugal and explore!

Smiling all the way to the bank

The Prime Minister, having just announced a €900 million bail-out package for car manufacturers in Portugal, has predicted that consumers will have more cash in their pockets in 2009. This bold statement has so far remained unchallenged by the opposition, who appear to have accepted José Sócrates’s argument that the lowest ever interest rates, stagnating inflation and fuel at 2006 prices translate into Portuguese being better off financially than they have been the past year.

“Families can look forward to having more disposable income in 2009, which is a direct result of the dropping Euribor and interest rates. This will greatly alleviate mortgage repayments, which are today a significant part of family expenses”, argued the Prime Minister.

The Prime Minister was speaking on the eve of the European Central Bank announcing yet another substantial cut in its benchmark rate.

“Families can also expect lower inflation in 2009 and thereby gain buying power, while civil servants will have a level of buying power they have not seen in years”, José Sócrates predicted after announcing a package to save the country’s car industry while receiving an undertaking that none of the 10,000 workers employed by manufacturers in Portugal will be made redundant in 2009.

In addition, the price of crude dropped again this week, the Prime Minister recalled, and oil is now 100 USD a barrel cheaper than it was when it peaked at 147 USD in July.

Meanwhile, strict banking regulations in Portugal will ensure that home owners will see the full extent of the latest interest rate cuts reflected in their monthly repayments.

With the European Central Bank having slashed interest rates by 75 base points to 2.5 percent, which follows cuts of a half percent in October and November, even the smallest mortgage holders in Portugal can now anticipate considerable savings.

Unlike Britain, where the majority of banks have absorbed interest rate cuts in an apparent bid to boost their dwindling profits, banks in Portugal are subject to stringent regulations forcing them to pass on any interest rate cuts as soon as they become applicable.

Besides fixed rates, lenders in Portugal offer customers the opportunity to sign up to the Euribor index over a period of either three or six months, with most institutions preferring the first option.

Thursday’s cuts will therefore only be felt, at their earliest, next March, while the October 0.50 percent cut will become applicable in January.

Once all these reductions have come into force, home owners can look forward to seeing their monthly repayments fall by as much as a third.

But the good news for home owners is that analysts are predicting further rate cuts, with some venturing as far as predicting a base rate of 1.5 percent during the course of 2009.

A strong argument for further cuts is that Europe is still lagging behind the world’s other major economic powers in terms of lending rates.

While the Bank of England slashed rates on Thursday afternoon from 3 to 2 percent, the United States Federal Reserve is sitting on a rate of 1 percent, while lending in Japan comes at a mere 0.3 percent.

However, banks in Portugal are seeing a growing number of their customers face increased difficulties at meeting their monthly financial obligations.

But once again, a number of measures have been created by banks to allow customers room for manoeuvre in times of economic hardship.

A source at Portugal’s largest private bank, Millennium bcp, told The Portugal News on Thursday that repossessions are a costly and undesirable exercise and banks would rather exhaust all other avenues at their disposal before taking drastic measures against a borrower.

With unemployment rising, pay increases stagnating coupled with the spiralling cost of living, and sky-rocketing divorces, a number of customers have literally been bailed out by Portuguese banks allowing them to hold on to their properties when perhaps in other western countries they would have been out on the street.

While Gordon Brown’s move this week to cover some or all the interest on mortgages of people in financial difficulty has received widespread support in Britain, it falls short by moves introduced by some banks in Portugal allowing struggling customers to cut their mortgages by half for up to two years, or cut the percentage but have the ‘discount’ on repayments extended for up to five years.

A former home owner in the UK told The Portugal News he was ordered to pay a £10,000 penalty for paying off the £200,000 mortgage on his London home before the agreed termination of the agreed loan period.

In Portugal the cost of liquidating or transferring a €200,000 mortgage ahead of schedule will be levied at €1,000, a tenth of the cost when compared with Britain.

This minimal cost allows borrowers to move banks relatively easy should better conditions be offered elsewhere, and often, banks will absorb the 0.5 percent penalty in order to secure a new customer.