The latest monthly Portuguese Housing Market Survey from the Royal Institute of Chartered Surveyors and Confidencial Imobiliário (Ci) shows that the decline is across Lisbon, Porto and the Algarve.
Price falls gathered momentum in March, driven by falling demand. The report points out that rising supply is not an issue as new vendor instructions have been declining since last December. But the combination of accelerated falls in prices and demand has dealt a sharp blow to confidence, with both price and sales expectations sliding deeper into negative territory.
The national activity index fell 2 points further to -26, but the national confidence index declined 22 points further to -51.
Lisbon saw the sharpest declines, while the Algarve saw the least sharp. The trends in demand, supply and expectations prevalent at the national level are by and large reflected at the regional level. One notable difference is the trend in new instructions, which are once again rising in the Algarve, flat in Porto but they continue to fall in Lisbon.
Finally, the survey continues to show that residential sales agents are experiencing much sharper price falls than developers, both at the national and the regional level. However, this trend is not reflected fully in expectations; although agents’ price expectations are far weaker than developers’, their expectations for sales are relatively stronger, though still negative.
‘Survey respondents note that the deteriorating economic outlook and heightened political tensions are the main factors weighing down on activity and sentiment,’ said Ci Spokesman, Ricardo Guimaraes.
‘Lack of mortgage credit is an additional factor that is restricting activity levels, but for those who are still able to purchase, some respondents noted that values look compelling,’ he added.
‘The Portuguese housing market can be characterised by falling prices, falling activity levels and deteriorating confidence. This is set against a backdrop of rising inflation, elevated unemployment and a shrinking economy,’ said RICS senior economist, Josh Miller.
‘Declines in prices are being driven by weakening demand; rising supply is not presently an issue. There is not much divergence at the regional level; Lisbon, Porto and the Algarve are all experiencing price declines,’ he added.
