Patience is the word of virtue for real estate in Portugal!
Sellers should be patient as time goes by and the market adjusts to the effects of the crisis.
It is said patience is a virtue. Property sellers trying to offload their properties during this COVID-19 crisis may have to take those words to heart.
Mid-May is usually the time of year when homes tend to sell quicker, as spring represents a new life and personal fulfillment after the winter period. With the pandemic of the coronavirus and lock-down for nearly three months, the lack of foreign investors, the rising of unemployment rates and the likely economic downturn are dramatically slowing the housing market.
In March we were still in full swing to achieve a record year, with a demand much higher than usual comparing to similar periods of the previous year, which in itself were already an extraordinary result for real estate in Portugal. Was all this in vain? And now because of a health crisis everything has changed?
For buyers, it is now a phase of analysis and prospection to see how the housing market will react to this new reality. For sellers, it is a phase to be patient and it just means that they must be prepared to expect a much slower sales process.
On Thursday 4th June there was a very interesting videoconference from SMARTUS, in which Margarida Caldeira of Broadway Malyan explains that in Asia the markets are already resuming a similar pace as before the crisis, and Francisco Horta e Costa of CBRE confirms that the effects of the crisis are already being surpassed gradually in countries such as China who were first hit by the new coronavirus and had to face the consequences on the economy much sooner. However, they have already resumed their economic activity a few months ago and show a significant recovery in the real estate business. Pedro Coelho of Square Asset Management also of the idea that the money for the investment has not disappeared, and that it will have to be applied, because there are no alternatives. There will certainly be new trends that we will have to follow in the real estate industry and we can learn from countries like Singapore, Taiwan and others in carrying out these new realities.
The real estate market is not just a challenge for sellers. The number of new home listings also fell by 28% compared to the same period in 2019, as such it is more difficult for buyers to find the properties they are looking for.
This may be surprising for many people, but prices have not gone down and, to date, prices remain at the same level as at the beginning of the year. And why is that? Although the economy is currently struggling and unemployment is rising as well as the high overall uncertainty, there are still more buyers than sellers. This imbalance could result in the keeping of prices in the coming weeks and months.
This is also confirmed in the table below published by the website Idealista.pt showing the sales price variations in Portugal.
TEXT: Paulo Lopes
