Within the Portuguese Housing Market Survey (PHMS) carried out in March, a sentiment survey carried out every month by RICS and Ci, professionals responded to two questions concerning their expectations in terms of sales and prices recovery within the housing market in the context of the current pandemic.
In March there was an abrupt deterioration on the sentiment of the operators who act within the housing market, with measures adopted to fight the spread of the coronavirus restricting their expectations concerning sales.
According to this survey, the demand indicator (queries by new buyers) dropped in March (there were 59% more respondents reporting a drop), after two months of consecutive increases, registering a drop in all regions covered by the survey (Lisbon, Porto and the Algarve).
The sales volume decreased in the month of March for 52% of respondents. With social distancing measures expected to continue during the next few months, short-term sales expectations are very negative, with 71% of respondents expecting for sales to drop in the short-term.
Ricardo Guimarães, director at Ci, commented in a release that «it is natural for short-term expectations to be low, reflecting the uncertainty about when the Covid-19 crisis will end. That is a critical factor, both for the economy and for the population’s health. Nevertheless, opinions concerning the post-crisis period are less pessimistic and anticipate a recovery within 12 months, once the outbreak is contained».
According to Ricardo Guimarães, «some operators noticed that a market deceleration was already taking place, caused by the legal changes to the Non-permanent residents and Golden Visa regimes. Nevertheless, there is a global perception that the recovery will depend in a large part on the impact this crisis will have on the economy, families’ income and companies’ availability to invest».
For Simon Rubinsohn, Chief Economist at RICS, «the drop in terms of the current activity indicators, as well as concerning future expectations, clearly reflect the emergency measures implemented to limit the spread of the coronavirus. The feedback also suggests that the Covid-19 legacy might be such, that returning to what could be called «normality» within the economy will take time and that families too should remain cautious for some time».