Home transactions fall 11.6%
Home transactions fell 11.6% in the first quarter of 2020 with 43,532 home transactions (purchases and sales) and 0.7% less than the beginning of 2019.
The figures were released by the Portuguese Estate Agents and Real Estate Professionals Association (APEMIP) whose president Luís Lima is not surprised. “The fall in the number of sales is hardly surprising because of the pandemic and the state of Emergency decree in March which caused three consequences: the postponement of contract exchange, the closure of establishments to the public, and the inability of making physical home viewings”.
“Given this situation it was to be expected that the number of sales would see a fall that will be even sharper in the second quarter of this year,” said Lima.
Admitting that the residential property sector is not immune to the consequences of the crisis, he adds, “The behaviour of the economy and the labour stability of families directly influences market behaviour. However, I believe that this sector will be the first to recover, having a knock-on boosting effect on other sectors such as tourism which will show a slower recovery.”
Lima says that overseas investment and city rental could provide opportunities in the near future because “we have even seen some signs confirmed by some financial entities that foreign demand has been increasing because of the positive way Portugal has performed in managing the health aspects of this crisis”.
Although there have been few actual deals, as soon as airline routes start opening up and people become more confident to travel, we should see a return to overseas investment in the sector,” said the APEMIP president.
On the other hand, “City rental will lead a new paradigm in the sector, both from an investment point of view, and from a market perspective,” he concludes.
Nevertheless, despite a fall off in sales there has not been a significant fall in home prices.
According to a survey carried out by APEMIP with 4,000 companies in the sector, 81.1% admitted a fall in sales turnover on the same period of May in 2019.
However, 83.9% said that house prices had remained the same, although 15.5% admitted that that asking prices had been dropped.
Luís Lima said, “I don’t see any justification for a fall in prices expect with a regards to a correction on properties that were perhaps over speculated in the first place.”
“If an excess of supply during the last crisis caused a fall in prices, this time there is a lack of housing stock, particularly for the lower middle and middle classes where there continues to be a lack of homes to meet demand.”