This was one of the subjects debated during the webinar "Sentimento do Mercado" (Market’s Sentiment), part of the cycle "O Roteiro da Retoma" (The Path to Recovery), promoted by APPII, Vi and Ci, which took place this Monday.
The numbers presented by Confidencial Imobiliário, in particular from its Índice de Preços de Transação (Trading Prices Index), based on SIR, show that the prices’ monthly variation went from 1.5% before the pandemic to 0.4% in March, 0.5% in April and 0.9% in May, which is «very important in terms of the market’s ability to resist as a whole to the price reduction strategy», said Ricardo Guimarães, director at Ci, who further highlighted that «there is a strong conviction in terms of the market’s fundamentals. We do not see prices dropping, they remain stable. The market is not yet feeling the need for price adjustments, all is conditioned by the duration of the pandemic».
According to the Investment Property Survey, a sentiment survey carried out by Ci together with APPII, the last three months were already marked by the pandemic’s uncertainty. If before the crisis there already was «some uncertainty about what the future might bring, in particular in terms of prices and sales», the scenario worsened under this new reality. The respondents’ expectations concerning price evolution went from 1.2% and 1.1% at the beginning of the year to -8.4%, in an adjustment scenario for the coming months and -15.7% in the number of transactions.
In a brief questionnaire carried out by the organisation during the webinar, most respondents stated they felt more optimistic (38%), or the same (39%) in terms of the evolution of the real estate market, when compared to March, when the pandemic started. 23% said they feel more pessimistic now.
65% of respondents stated that an eventual price drop soon will be visible, but reversible. 27% consider that the drop will be relatively small and only 8% consider that it will be significant and hard to reverse.
This expert also presented the Índice de Volume de Vendas de Habitação (Housing Sales Volume Index), a new metric which shows a significant drop in trading volume between March and April (-17% and -53%, respectively), but a 23% increase in May, when compared to the previous month, following the deconfinement period. And he concluded that «the market is expecting relative progress in terms of sales volume» for the coming months, which should culminate in an annual drop of 16% by the end of 2020.
Celerity and more investment are the main demands
According to Ci’s survey, bureaucracy continues to be one of the main obstacles pointed out by the market. There is also a consensus for the TVA on new construction to be reduced to 6% «it would be fundamental in terms of developing new offer», highlighted Ricardo Guimarães.
In the same survey, it became evident the «need to relaunch and give visibility to an international investment attraction strategy, in particular by relaunching the Golden Visa and Non-Habitual Resident regimes».
For Luís Gamboa, COO at VIC Properties and Tiago Eiró, Eastbanc’s CEO, the celerity of the licensing processes can be identified as the most important measure for the market’s recovery. Fernando Vasco Costa, Managing Director Portugal at Nexity, and José Gil Duarte, Essentia’s Founder & CEO, pointed out that the cities of Lisbon and Porto should take advantage of «a clear opportunity to position themselves in terms of planning and investment».
In terms of the measures to mitigate the impact Covid-19 had on real estate, 53% of respondents consider they are partially sufficient, 39% consider that they are not sufficient and only 8% assumed that the necessary measures have already been taken.
Sector and Government «more aligned than ever» on the importance of investment
The relation between the real estate sector and the political players was strengthened during the crisis, as attested by Hugo Santos Ferreira, Executive Vice-President at APPII, who guaranteed that APPII is close to the Prime-Minister and the Government and the real estate sector «are more aligned than ever on the importance of attracting foreign investment».
In that sense, APPII launched Programa Relançar (Relaunch Program) last week, which seeks to foster the attraction of foreign investment, based on the Manifest from the real estate developers, created to point out the main measures needed for the sector’s and the economy’s recovery.
At a time, when «there will be much more competition to attract foreign investment», the association defends that «it is necessary to relaunch the programs to attract foreign investment, simply and straightforwardly. It is a significant investment that is much needed right now. Its relaunch is a message sent abroad, that investors are welcome in Portugal».