Portuguese residential property market still weak, new survey shows
|Monday, 26 March 2012|
The residential property market continued to be weak in Portugal in February in terms of both sales and prices with all sectors experiencing falling demand.
But the lettings market is stronger, according to the latest house market survey from the Royal Institution of Chartered Surveyors and Confidencial Imobiliário.
It shows that the national price balance remained broadly unchanged, moving from -63 to -64, indicating 64% more respondents experienced price falls rather than rises.
House price declines continue to be driven by falling demand. Rising supply is not presently an issue, with new vendor instructions falling consistently since December 2010.
Meanwhile, the national confidence index, which is a composite index based on price and sales expectations, deteriorated further into negative territory from -44 to -53, a nine point drop.
However, rents are falling and rental expectations are negative. This could reflect an excess of rental stock in the market but there is also anecdotal evidence of a mismatch between the type of stock offered to let and that in demand.
‘Although sales volumes continue to fall, activity in the lettings market is rising as households who cannot access mortgage finance are opting to rent instead,’ said RICS senior economist, Josh Miller.
further this shift in tenure preference can run. There comes a point, given rising credit constraints and joblessness, where effective housing demand hits an upper limit,’ he added.
CI Spokesman, Ricardo Guimaraes said that survey respondents are increasingly highlighting the unemployment situation, not only because it is rising, but also because of its high level. ‘This is beginning to have an impact on both the sales and lettings sectors, with demand falling in both cases. Rising joblessness precludes getting a mortgage on the one hand, and limits what a household can afford pay in rent on the other hand,’ he explained.
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