The latest data from the Residential Price Index, compiled by Ci, shows that in February this year the market appreciated by 0.6%. Looking at the 12-month variation, the index went from 18% to 11%, seven points below the level observed at the end of 2022. However, looking at a three-month variation, the index registered an increase of 3.6% , a value that represents a strong acceleration compared to the 0.3% that was recorded recently, in November.
By Ricardo Guimarães *
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In other words, despite the consensus established in public opinion that the market is slowing down, the data show signs of a reversal in the smoothing of price increases and this is a fact that, in the current political and social framework, it is important to give attention to. due attention.
Recent news indicates that in 2023 there was an 18.7% drop in the number of sales, information that reinforces the collective feeling regarding the expectation of softening prices. However, the truth is that this is warmed-over news, reflecting the behavior that the market had between the end of 2022 and the beginning of 2023 and ignoring that the second half of 2023 was marked by stabilization and even a slight recovery in the number of transactions. SIR data, and then INE data, show that from the 2nd quarter of 2023 onwards, sales stabilized at around 33 thousand (Mainland), a number that will remain the same at the beginning of 2024.
Now, despite all the adversities, the way in which the market has successively appreciated in value, as well as being able to stop the loss of demand, makes it present itself as a solid ground for the entry into 2024, a year in which it anticipates a reduction in the conditions for access to housing credit and the progressive return of the share of demand that was most penalized by the increase in interest rates.
Precisely, the latest data from the Portuguese Housing Market Survey shows that real estate consultants are already feeling an increase in demand, bringing the sales expectations indicator back to positive territory, after 16 months of decline, in a recovery in market sentiment that is corroborated by the behavior of the number of bank evaluations and even the credit granted.
Having arrived here, therefore, the outlook for the year 2024 appears to be one of recovery in demand dynamics and consequent stimulation of market appreciation.
This may be good news but, in a year marked by elections and in a context of crisis in access to housing, the return to “business as usual” could be the trigger for the worsening of the warning signs already evident in the national political system, increasingly more fueled by left and right populism.
The data from this edition show that in the Lisbon ARU, international demand and demand from companies had a stable or even positive behavior in 2023, in contrast to national demand, which fell by 23% (highlighting buyers from the North Americans, whose connection to Portugal is growing and independent of special investment attraction regimes, unlike the Chinese). This data shows how the market response is asymmetric and implies targeted policies.
One, frequently cited, is the simple boosting of supply, reversing the current glaring construction deficit. The numbers are clear: in the last 10 years Portugal has built 17 homes per thousand inhabitants, against an average of 45 in the EU, and the countries that are currently seeing drops in prices have not only built at least twice as many as we have (Luxembourg stands out) , with 77 dwellings), as they come from higher price levels, and are not (unlike Portugal) conditioned by the impact of increased construction costs on the formation of sales prices.
But if the big challenge is to increase the supply, another equally important one is that the supply is accessible. And for this, it is important to quickly implement all measures that can contribute to reducing the burden on promotion and purchasing activities. Bureaucracy, taxation and ordering. Urgently..
The level of demand is enormous, being accentuated by social and media expectations that new policies can bring real results.
In June we have Europeans…
* Director of Confidêncial real estate magazine. Editorial originally published here.
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