How the real estate market is reacting to COVID-19 in Portugal

A survey has been conducted by the portal Out of the Box - Real Estate&Finance showing how buyers and sellers are behaving in confinement.

Photo by Joel Muniz on Unsplash
Photo by Joel Muniz on Unsplash
13 April 2020, Redaction

Real estate experts Gonçalo Nascimento Rodrigues and Massimo Forte recently urged estate agents in Portugal to answer some questions about how the market is reacting, both on the side of buyers and sellers, given the current uncertainty caused by the coronavirus pandemic. These are the main conclusions of the survey "How is the real estate market reacting?", conducted by the website Out of the Box - Real Estate&Finance.

The results of the survey, carried out at the end of March 2020 (22nd-24th), with 792 valid responses, for a total of 1,639 hits, were presented in a live stream on the social network Facebook and had a large virtual audience. The questions posed to professionals, and their answers, refer to real estate activity in the last two weeks of March since the declaration of the state of alarm which was brought into action on 18th March 2020. 

The real estate market in Portugal in 2020 started strongly, however, according to the study, over 90% of the professionals surveyed felt a drop in the number of people thinking of buying property at this time. Gonçalo Nascimento Rodrigues also reminds the public that this period encompasses a time "when people were still working with relative tranquility". On the selling clients' side the feeling is very similar: almost 80% of the agents report that they had a drop in the number of potential clients interested in selling their homes.

For Gonçalo Nascimento Rodrigues these figures reveal a "real estate market crash both on the buying and selling client's side".

The survey also shows that the majority of the clients (69%) already in negotiations with agents have not given up on selling their houses - only 21% have given up on selling, according to the data presented. Something that is seen as "natural" by both experts. On the buying client side, the scenario is quite different: almost half of clients have given up on their purchase (47%).

To the question "Did any customer with signed contracts give up on a sale?", the agents answered, in a large majority, "no" (79%). Only 21% said they had customers who completely gave up.

Gonçalo Nascimento Rodrigues points out several aspects that will weigh on investors' decision making in the current  climate, such as their financial capacity, expectations for the future, namely from the point of view of the devaluation of a property, among others. Massimo Forte also adds the "ingredient" of emotion, such as fear or panic, which can condition decisions due to the moment in which we are living. For Nascimento Rodrigues it would be important, therefore, that the Government legislate on the introduction of moratoriums regarding deeds, along with measures already introduced to help rental tenants, i.e., that there is no obligation to close a deal in a scenario that is still uncertain. 

The study also reveals that majority of agents are no longer arranging visits and/or appointments. To the question "Are you continuing to organise visits and make bookings?", 64.52% of agents answered "no", something that is perfectly natural, according to experts. This, for the moment, is something inevitable.

As a consequence of these unprecedented circumstances, where then do property mediators and agents plan to invest their time during the state of emergency? According to the survey results, agents intend to invest mainly in online training, webinars, virtual conferences and contact with clients. This is something that experts classify as "extremely important", since it is essential that professionals remain active, and regular contact with the market is encouraged.

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