"The slowing down of housing transactions should be followed by a long-awaited normalisation of prices," says Nelson Rêgo, CEO of Prime Yield.
The new coronavirus pandemic is already leaving, and will continue to leave its mark on the Portuguese and world economy, with direct consequences in the real estate sector. However, the effects of this crisis will not be as impacting as others, considers Nelson Rêgo, CEO of Prime Yield, part of Gloval: "In general, I believe that the page turn of this crisis may be faster than the one that started in 2008".
"Bearing in mind that all previous pandemics (that took place in 1918, 1958, 1968 and 2002) have been associated, from the point of view of the economic cycle, with a V curve, we have reason to believe that the same will happen with this unprecedented COVID-19 crisis. Moreover, this time Portugal will not react with the time gap that characterises our recovery vis-à-vis our European counterparts, since they too are in the same situation as us", stated the CEO, in a statement.
According to Nelson Rêgo, "the immediate halt to housing transactions should be followed by the long-awaited normalisation of prices when activity resumes. This slowing down of demand ends up being something artificial and temporary, so buyers will return to the market, but more cautiously even in a scenario of limited supply, which will impact on the pace of price increases", he predicts.
As far as the office market is concerned, the "stoppage of economic activity and the wave of teleworking" puts the sector, "alongside retail, where shopping centres are forced to close under strong pressure to reduce rent".
Moreover, the sale of bad credit - Non-Performing Loans (NPL) businesses - which in Portugal reached a record 8,000 million euros in 2019, should feel the effects of the COVID-19 pandemic, with the "postponement of large portfolio transactions". This is because "the compliance of the ratios by the banks will be relegated to second place", concludes Nelson Rêgo.