The period of recovery of the real estate market registered in Portugal since the deflation seems to be slowing down, not only due to the effects of seasonality, but also due to the macroeconomic cooling that is beginning to be felt in the national economy: contraction of GDP, rising unemployment, very limited recovery in tourism, reveals the monthly report by the consultancy Imovendo.
The impact of seasonality is due to the fact that summer is historically a dynamic period in the demand for real estate, not only due to the interest in purchasing a second home, but also due to the curiosity that the housing segment arouses, as well as the need to find investment opportunities. to put them on the rental market for students and teachers (who start classes in September).
Now, this peak of demand and dynamism tends to structurally cool down until the end of the year, something that this year should also happen, perhaps, even more significantly, since part of the demand that fed the market in these last months, resulted investment decisions prior to confinement and needs generated by the confinement itself, so this driving force will now lose traction and drag the market with it.
In the analysis of economic performance, imovendo highlights the evolution of the unemployment rate in August, which reached the highest value in the last 32 months (since November 2017) and which is unlikely to inflate, so the buying and selling market should affected (to the potential benefit of the rental market).
With regard to tourism, this was the sector of activity that most leveraged economic growth in Portugal over the past few years and whose positive externalities for real estate were unequivocal. Currently, the year-on-year drop in new registrations of Local Accommodation reaches 80% in some districts and an eventual second wave of the pandemic will certainly not allow the necessary recovery of this activity.
For the moving, since the end of the confinement that the real estate market has faced an extremely attractive dynamism with regard to residential demand, not only with a focus on houses, but also in apartments, especially those that manage to ensure comfort variables that guarantee more area of experience, be they backyards, public areas, large balconies or simply terraces.
“Many professionals have reported good results in the last quarter and, certainly for this reason, since the end of May, 300 new Real Estate Mediation companies were created, an impressive number (since it represents close to 5% of the sector) and which appears in counter-cycle, but that puts added pressure on a sector that faces an uncertain future”, anticipates Manuel Braga, CEO of the real estate consultant.
The real estate market has managed to show enormous resilience, it has assumed itself as a secondary employability scholarship that has allowed thousands of families to guarantee complementary remuneration, but the expected contraction of the economy, together with the anticipated end of the moratoriums on housing loans , constitute relevant challenges that the market has not yet begun to anticipate.