APEMIP “bombshell” warning

 In Associations, News, Real Estate

A leader in Portugal’s real estate sector is calling for an extension to moratoria on borrowing for a further year to avoid the sector facing “atomic devastation” .

Luís Lima, president of the Association of Real Estate Professionals and Estate Agents (APEMIP) says, “Sooner or later this bomb is going to explode, so people and companies still have some time to create their atomic shelters to defend themselves as much as possible against the fallout.”
The crisis is expected for September, when the end of the exceptional regime on loan repayments could result in an “authentic atomic bomb” blowing up on the economy as a result of mass credit default and NPLs.
At the end of 2020, the Portuguese bank sector had over 20% of its total lending covered by the moratoria scheme, the third highest ratio in the European Union. The Portuguese president, Marcelo Rebelo de Sousa has already called for the moratoria to be extended until 2023 or 2024.
Lima agrees, saying that the extension on the credit grace period should be for at least another year or “as long as necessary for a total economic recovery”.
It comes at a time when one half of estate agents predict significant business loss in 2021, with just 24% believing they will increase their sales this year according to a survey carried out by the Portuguese Association of Estate Agents (ASMIP).
Last week, the CEO of Bankinter Portugal, Alberto Ramos, said that the period covering the moratoria should be “reviewed for those sectors which are most affected by the crisis,” recalling that when moratoria plans were drawn up, the banks and government were working on the premise that 2021 would be a year of economic recovery, which, with January and February’s lockdown, may not now be the case.
Lima says that when the moratoria ends, people will rush to sell property to release cash and this will increase the amount of property supply in the Portuguese housing market and drive down prices as people seek a quick sale.
“We have the experience of what happened in the previous crisis, and I think that we all understand that we must, at all costs, avoid a repetition of the same pattern,” says the APEMIP president.