55
55

PHMS: Housing Sales Decrease With Summer

13 August 2018

Early summer brought a slowdown to the residential market in Portugal, with the growth in sales and interest from potential buyers slowing in June.

According to the Portuguese Housing Market Survey (PHMS), the lack of supply is one of the principal reasons for the slowdown, limiting potential buyers’ choices. However, the slowdown is also the result of a moderation in market activity that has been witnessed in recent months.

Ricardo Guimarães, director at Ci, said: “This is not the first time that activity in the real estate market has declined in the summer months, especially in relation to the demand from potential buyers. The same thing occurred in previous years, even in the Algarve, where it is high.”

Also, “although the June figures point to lower levels of activity in some regions of the country, it follows a period of solid growth. Given that economic indicators remain robust and consumer confidence strong, prospects for the residential market remain healthy in the short term, even if the growth in activity may see some moderation,” Simon Rubinsohn, Chief Economist at RICS, added.

Nonetheless, the sentiment among market operators regarding the pace of transactional activity has cooled sharply in recent months, and June’s results were the most modest since October 2013, although expectations remain positive for every region in Portugal in the short run. “Some agents note that investors perception has changed. They are now feeling more cautious either because of the current price level or as a result of changes to the legal regime that have been under discussion in recent months,” Ci’s director stated.

The June PHMS shows that demand for housing in the country continued to grow, but at the slowest pace since December last year. Despite strong trending growth in Porto, it remained practically unchanged in the Algarve and Lisbon. Sales also show some regional asymmetry, with Porto once again registering strong growth in transactions, while in Lisbon, reported sales grew only marginally. There was even a slight decline in monthly terms in the Algarve. Supply continued to decline in June, the 15th consecutive month where the number of new homes coming on the market fell. Even so, prices continued to rise in all regions, with respondents anticipating further growth in the short- medium- and long-term. Regionally, prices in Porto are expected to see the highest price gains over the coming twelve months and, on average, over the next five years.

As for the rental market, the June’s PHMS shows that demand remains firm, boosting rents, particularly considering the shortage of new homes coming on the market.

Original Story: Diário Imobiliário

Translation: Richard Turner