In this tough financial climate we continue to find ourselves, many are left with their assets floundering in the wind, so to speak! In a recent survey by The Royal Institution of Chartered Surveyors and Confidencial Imobiliário (Ci) of the Portuguese housing market, covering the sales and lettings sectors, shows a continued decline in property sales and a sharp rise in property lettings.
Interestingly, until September, existing home prices had been falling faster than new home prices. However, the last two months have shown developers becoming less resilient to dự án tnr long khánh the fall in house prices. December’s survey actually shows new house prices falling at a faster rate than existing homes.
In the lettings market, demand continued to rise, as did new landlord instructions. Lettings anticipations recorded a sharp rise and remains firmly in a positive stance. Rents remained negative, with a reading consistent with falling rental levels. Rental expectations, whilst still falling, did so at a much slower rate in December. Indeed, outside Lisbon rental expectations are broadly stable (in Porto and Algarve), indicating that it is a regional rather than a national trend. Lettings are also the highest in Porto and the Algarve. The fall of rent in some areas could be reflecting an excess of rental stock on the market but there is also evidence of a mismatch between the type of property offered, and that in demand.
The regional data tends to be more volatile than the national data, respondents in the Algarve saw the sharpest house price falls while those in Lisbon saw the sharpest falls in rents. Confidencial Imobiliário Spokesman, Ricardo Guimaraes commented: “According to the Memo signed with the Troika, December is the deadline for the Portuguese Government to change the lease law, which should improve the market confidence, especially regarding the default risk from tenants. This is moving agents’ expectations. At the same time, the most commented topic remains the financial wrangling between potential buyers and banks, as well as the amount of houses directly sold by financial institutions, which is having a negative effect on prices.”
RICS Senior Economist, Josh Miller added: “Although sales volumes in the housing market continue to fall, volumes in the lettings market are rising as households who cannot access mortgage finance are opting for rented accommodation instead. Given the deteriorating macro economic backdrop – unemployment now stands at 12.9% while economic sentiment has collapsed – and the tightening in credit conditions already underway, the lettings market is likely to continue experiencing high volumes of activity for the time being.”
This sort of trend could be typical for many European countries, so if you are having trouble selling your property, perhaps you could look at the rental market for the next few years to keep your investment level. On the other hand, if you are looking for an investment, it seems it is a buyers’ market out there that could be part of your long term investment plan.