The August Royal Institution of Chartered Surveyors/Ci Portuguese Housing Market Survey shows that that both the national activity and national confidence indices deteriorated.
Real estate agents are experiencing much sharper price declines than developers, especially in Lisbon and Porto.
The national activity and national confidence indices fell by eight and two points respectively to -33 and -51, while the national price balance fell from -55 to -59.
At the national level, the latest results show that price declines continue to be driven principally by falling demand. Indeed, rising supply is not presently an issue, with new vendor instructions falling consistently this year.
The survey results also highlight that residential agents continue to experience much sharper price falls than developers. Moreover, this trend is not only apparent at the national level, but is also clearly evident in each of the three regions covered by the survey, Lisbon, Porto and the Algarve.
However, the national picture masks some interesting regional variation, with market conditions in the Algarve holding up relatively well compared to Lisbon and Porto. Indeed, while prices and sales levels continue to fall across all regions, the pace of decline moderated in the Algarve but accelerated elsewhere.
Also, while price and sales expectations remain negative in all regions, they are least so in the Algarve.
‘In Portugal, it is the demand side of the equation that is weighing down on prices, with the double digit unemployment rate feeding through to weakness in new buyer enquiries,’ said RICS senior economist, Josh Miller.
‘Unlike in Spain and Ireland, oversupply is not an issue; the official statistics show no evidence of overbuilding prior to the economic downturn and new vendor instructions have been falling all year. Consequently, once the economy starts to recover, Portugal will not have to cope with the residential inventory issue that other countries face,’ he added.
Survey respondents view higher taxes as another factor constraining housing transaction levels, on top of already elevated financial and credit restrictions, according to CI spokesman, Ricardo Guimaraes.
‘However, on the plus side, respondents note there opportunities in the residential market, particularly in the rental sector, for those purchasers with equity,’ he added.
