Real Estate: “This Isn’t for the Portuguese”

19 September 2018

Volkert Schmidt, real estate director at Novo Banco, said that he hears the phrase at “every” meeting he has with real estate developers, and criticised the current excessive focus on foreigners.

“It happens every time I sit down at a meeting, and I expect that everyone here had the same experience,” Volkert Schmidt, real estate director at Novo Banco, explained. Whenever real estate developers present their projects – Schmidt did get into specifics but seemed to be speaking of Lisbon – they always say the same thing: “This isn’t for the Portuguese.”

Mr Schmidt was speaking during a panel at the Portugal Real Estate Summit, which brought together dozens of industry leaders in Estoril. The executive – which Lone Star, which owns Novo Banco, placed in the institution – stated that “it is not feasible” to have developers focus solely on the needs of foreign buyers.

Schmidt’s statement came during a period that is witnessing a major recovery of the market, stemming in large part by foreign investment, especially in the city centres of Lisbon and Porto. The internationalisation of prices in these urban areas – the price per square meter in the capital now runs from €4,000 to €10,000 – means that a significant fraction of the Portuguese people are now unable to afford housing in those areas.

In response to Schmidt’s interjection, an audience member, a manager at BCP, stated that he knew of several projects under development that are directed at Portuguese buyers. The houses are “outside of Lisbon” and are aimed at “a part of the middle class,” costing three thousand euros per square meter.

The manager added that he knows of investors who are looking for land for residential projects in several satellite cities of the metropolitan areas of Lisbon and Porto. “But not in the centre,” he said. “It will be very difficult to live there.”

Schmidt warned that in order to live in the main cities, “buyers’ mindsets will change,” suggesting that, as in other capitals, houses will become smaller and smaller to offset prices.

A consensus formed at the conference: there is room for the emergence of a major real estate developer, and there is room for the construction of new homes inside – but above all outside the cities.

Original Story: Sábado.pt – Bruno Faria Lopes

Photo: Sergio Lemos

Translation: Richard Turner