Houses Selling Quickly but Property Owners Will Soon Lower Their Prices

25 February 2019

Average sales times have been declining over the past few years, but these days a higher portion of homeowners are beginning to rethink their asking prices.

Both the kitchen and the bathroom needed renovations and the walls a fresh coat of paint, but that was not enough to prevent an amazingly rapid sale. The Ferreira brothers’ house in the heart of Lisbon found a buyer in just three days. “The agent called to tell us that he was going to publish the listing. Considering the agency’s network and requests by clients who were looking for a house with similar characteristics, he expected more than a hundred visits.” It didn’t take that long. The first couple to visit the property accepted the asking price and agreed to acquire the property. “I can’t say that it wasn’t a surprise, especially since we had already tried to sell it in 2013 and 2014 and had just two or three people interested in the property, offering much lower amounts,” Mário Ferreira told Dinheiro Vivo.

That was still due to the financial crisis, but things have since changed. Last year, the average time required to sell a property fell once again. In Lisbon, average sales times fell to just six months, compared to nine months in 2013, according to data provided to Dinheiro Vivo by Confidencial Imobiliário. Sales times have fallen throughout Portugal, reflecting not only greater consumer confidence but also increased purchasing power.

“During the crisis, sales times increased. This variable does not undergo drastic swings, but reflects a decrease or increase of liquidity in the economy,” Ricardo Guimarães of Confidencial Imobiliário noted, added that “we expected the growth in liquidity after the crisis would reduce sales times, and this was the case.”

The decrease in sales times has occurred throughout Portugal. In Lisbon, average sales times fell by three months between 2013 and 2018. In Porto, during the same timeframe, average sales times fell by five – from 11 months to six now. In the Algarve, in 2016, properties took an average of 15 months to sell, now it’s just nine.

The bottom of the barrel

However, market observers expect new difficulties. The sector isn’t expected to enter into a new crisis, but “there are fewer houses on the market and those that will become available” will generally be undesirable, said Luís Lima, the president of APEMIP, an association representing the real estate agencies and professionals.

Developers, along with construction companies, believe that the market needs 70,000 new homes to reach an equilibrium between supply and demand. “In the next year and a half about 30,000 new home will be built, but a large percentage of those are for the upper-middle and upper segments, which will not resolve the existing demand,” Mr Lima stated. The executive was unsparing in his in criticism: “The market was not encouraged, creating doubt among construction companies and developers, limiting new investment and leading the market to stall potentially. We’ve warned about this for a long time: everyone has to do something, especially the municipalities of Lisbon and Porto,” he told Dinheiro Vivo.

That’s not all. Along with a lack of properties, which is starting to limit market activity, Mr Lima also believes that high prices will also play a role, dampening the market further.

“I hope that property owners will start trying to sell their properties for as reasonable an amount as possible so that they can continue to sell,” APEMIP’s president warned, stating that the growth in prices has given many sellers unreasonable expectations.

Original Story: Dinheiro Vivo – Ana Margarida Pinheiro

Photo: Marisa Pereira / Global Imagens

Translation and editing: Richard Turner