Portuguese need more and greener housing
The urgent need to provide new and “greener” housing stock for the middle classes to buy or rent was debated and mulled over at the III Real Estate Development in Portugal Conference – COPIP which took place in Lisbon on 30 June.
Organised by the APPII (Portuguese Association of Real Estate Investors and Developers) and magazine Vida Imobiliária, at Monsanto Secret Spot, the issue of Portuguese access to affordable housing was front and centre of the debate.
The Director of the property magazine Vida Imobiliário, António Gil Machado, opened the day’s debates by stating that the event was the largest real estate developers conference that it had organised with the APPII to date.
The President of the APPII, Hugo Santos Ferreira, made a short summary of the issues to be debated throughout the day and asked the question “2022 is proving to be a challenging year because of the end of the sanitary crisis; can the economy survive a virus that wanes and returns?”
Hugo Santos Ferreira believes that construction and real estate sector companies are and will continue to be part of the discussion and solution since the “Portuguese need more and greener housing”.
Since lack of supply and the increasingly higher costs of raw materials is two of the “great difficulties” faced today, Hugo Santos Ferreira also warned about a lack of existing manpower which is “preventing new projects from getting off the ground”.
“We haven’t got enough qualified workers. It is estimated that the market needs around 80,000 construction workers (…) it is vital that Portugal becomes more attractive for labourers”, he said.
The APPII president pointed out that the objective of the RRP (Recovery and Resilience Programme) is to “bring recovery and resilience to companies and the economy, but “we’re not seeing one red cent” from this programme. Quite the contrary, it has not brought recovery and resilience has been lacking”.
Given the enormous challenge that sustainability represents today because of higher “inflation, interest rates, lack of manpower, soaring building costs, uncertainty over the recovery of the tourism sector, and also Portugal’s old housing stock”, the president of the APPII pointed out that the real estate sector is “firmly committed to working towards the decarbonisation and energy efficiency of buildings”, adding that real estate developers are ready to help the Portuguese build more green housing, but this meant that “projects have to be financially viable”.
Housing demand in new areas
The first presentation of the event focused on a study about access to housing for the Portuguese presented by Ricardo Sousa, CEO of Century 21 and Ricardo Guimarães, Managing Partner of Confidential Imobiliário.
Stressing that the Portuguese real estate market was “hyper-local” with very different dynamics, Ricardo Sousa said that the “market and its stakeholders had shown a great capacity for resilience and adapting to different contexts” and “we are seeing very strong demand with people buying, investing and renting. We have new areas of Portugal which are seeing demand from house hunters, particularly from the United States. Families have more savings and this is driving demand”.
Giving an overview based on factual and relevant statistics, Ricardo Guimarães said “the situation we have today is completely different from the one we experienced during the financial crisis”, revealing that data for 2021 showed a restricted number of houses on the market” (i.e., a lack of supply compared to great demand).
He also said “we have a new generation of real estate developers that will decide how we should “face” these new cycles, issues such as the increase in interest rates”, and added “in times of strong inflation, a reduction in house prices was not expected”. “It is not now that house prices are likely to come down”.
Ricardo Sousa said that families were losing the financial ability to rent in Lisbon, Oeiras, and Cascais in a market that was generally “much more elastic and flexible”. He also presented figures showing an interest rate of 1%, revealing that there is “an increase of €69 on mortgage repayments for house buyers because of rising interest rates”, stressing “here, real estate development is facing a trial by fire”.