Real estate will accelerate in 2022 with rehabilitation and out of cities

It is almost a chronic problem in Portuguese society: lack of housing at prices that most families can afford. In the recent past, both the government and some municipalities have implemented policies that focus, namely, on renting at lower prices than those commonly practiced by the market. And yet, the problem resists all efforts.

Unlike what happened with other sectors of activity, real estate showed clear signs of resilience during these almost two years of pandemic. The worst fears, pointed out at the beginning, that the sector could be infected by covid and suffer a severe brake, were not confirmed. On the contrary. High demand for home persists and prices continue to rise, although they have slowed down somewhat.

"There are several challenges in the residential real estate market, namely the one that is the great imbalance between demand and supply", emphasizes Patrícia Santos. "Prices continue to rise. What we observed is that the average value of the bank valuation from September 2020 to September 2021 - INE data - increased by 9.5%. What we managed to valuate from the properties we sell was an increase in 5.5% in the average sale value. Prices continue to rise, although less and less, and this imbalance between supply and demand is what is causing the problem, because there is no new construction", he adds.

Before the pandemic, Portugal was already quite attractive to foreigners, a trend that was maintained, both because of the security image - which already existed and continued - and for health reasons. "The pandemic brought this situation to light and the great demand we had was from foreigners. In addition, with the pandemic, there are delays in new construction - both in the completion of the buildings and in the ongoing licensing processes. At the moment there is a huge shortage of product", notes the CEO of Zome.

Early parliamentary elections are scheduled for January 30th. Challenged to define the priority in terms of housing that the next government should assume should be, Patrícia Santos has no doubts: knowing the needs and bringing all actors together at the same table, because the problem cannot find a solution unilaterally.

"The most important thing is to understand what demand is. Right now, there is a mismatch between what families are looking for and the housing supply that exists. It is extremely important to have this understanding of what product needs to be placed on the market. And then, find financial solutions that meet the financial capacity of families. When we look at this aspect, we realize that there has been a great evolution in what has been the type of demand for mortgage loans. Historically, Portugal is a country that has always resorted a lot to variable rates, contrary to the trend in other European countries. We see that 2019 and 2020 were years in which fixed rate credit started to increase - compared to what was marginal -. All this only works if all sectors work hand in hand", he defends.

Vítor Pereira, member of the Executive Committee of Bankinter, who heads the areas of Products, CRM, Marketing and Digital Channels, recognizes that, in the case of this bank, the "flat rate has been increasingly an option" for customers who they are looking for credit to buy a house. And it justifies this option with a wider range of available solutions, but "above all by valuing the stability factor that it provides. With the cost of housing being one of the most relevant expenses in the family budget, the elimination of the risk of rising benefits, by the rising volatility of interest rates, it is clearly an advantage and above all a long-term security."

The Zome leader also points out that the lack of housing is "not a problem that the builders will solve alone; or that the government will solve it alone. It's an issue that must be brought to the table by the entire chain, to debate how, beginning to end of the line, a sustainable solution to the problem of the Portuguese housing stock and the economic capacity" of the families can be found.

With urban centers under pressure, with little possibility for new construction in the heart of cities like Lisbon and Porto, rehabilitation could be one of the trends of 2022, as well as decentralization.

"Our expectation for this new year is that the market will continue to grow. With regard to real estate mediation, we foresee continued growth, precisely because of the continued demand," says Patrícia Santos.

"What we have observed is that demand is starting to decentralize. Large urban centers are under pressure due to the lack of supply and what we are beginning to feel is that people are starting to look around large centers. We have been experiencing increases in the outskirts of Porto , Braga and Lisbon", says the responsible.

In addition to the pressure that exists in cities, there could be another factor triggered by the pandemic that is driving people to leave the big cities. Telecommuting entered the business world almost as a must at the beginning of the pandemic, when there were neither medicines nor vaccines to stop the spread of covid. Little by little, it has become entrenched and there are several companies - in sectors of activity more linked, for example, to services and technology - that have already decided that remote work is to maintain, either totally or on a part-time basis.

"I also feel that, in 2022, rehabilitation could be a solution. And we've been seeing an increase in that field. But this then has to do with the question of how quickly the licenses will come out. But in terms of requests, we have a growth in both construction and rehabilitation permit applications has been observed," he adds.

Source: Dinheirovivo.pt