The current economic context, characterised by high inflation and rising interest rates, is influencing several sectors, namely real estate. And that's why both buyers and sellers of real estate are wondering whether or not this is a good time to do business, or whether it is preferable to wait until 2023. Is 2022 a good time to buy or sell property in Portugal? Here's what the experts think.
- Buying property in Portugal in 2022
- If I want to sell, is it better now or later?
- What will happen in Portuguese real estate in 2023?
Buying property in Portugal in 2022
In general, and when it comes to buying a house in Portugal, most real estate experts believe that, despite the current circ*mstances, now is is a good time. Francisco Sierra, general director of Casavo in Spain and Portugal, says that if we analyse the historical correlation between Euribor and sales, the rise in interest rates does not have much impact on the number of transactions.
"We believe that 2022 will continue to be a good year to buy a property, as the measures promoted by the ECB to contain inflation will be offset by the increased activity of private and institutional investors." It specifies that although, as some reports point out, 2023 will be a year marked by a 15% drop in sales, the property market will stabilise, "as the impact of the rate increase will have an impact in the short term, improving the outlook for the future".
For his part, Jesús Duque, vice-president of Alfa Inmobiliaria, says that in the next six months the economy could cool down as a result of the war in Ukraine and all the events it has generated in the world economy, such as the ECB's decision to increase interest rates - which should continue to rise in the coming months. For the specialist, those looking to buy should realistically assess whether a future increase in mortgage lending could have a very negative impact on their financial situation. And evaluate which of the two options they prefer: if buying at a higher price and lower interest, or vice-versa.
Ernesto Ferrer-Bonsoms, director of Real Estate at Intrum Spain and business director at Solvia, explains that in the case you want to buy property in Portugal, the best time is now if you need financing, as interest rates should continue to rise in the coming months. "The increase in interest rates by the European Central Bank will affect much of consumer lending, including many mortgages. In addition, due to a lack of supply, prices are likely to continue to rise, albeit more moderately than in recent times."
If I want to sell, is it better now or later?
Jesús Duque explains that in the coming months we may see more difficulties in accessing home loans, higher rates and in some cases greater doubts about the labour market. "My opinion is that those who can sell now, and can't or don't want to wait a year or two to sell, should do it now."
When analysing a sale, from Casavo, they remind us that we are at a particularly favourable time for property sales, as interest rate increases moderately boost the number of purchase and sale transactions, something they believe will happen in the third quarter of the year.
For 2023, Casavo foresees an improvement in the sustainability of the real estate sector, driven by the measures currently promoted to contain inflation, the effects of which we will begin to observe in the medium to long term. "This is why when we talk about the best time to sell a house, we must highlight that we are at a particularly favourable time for this, which will continue throughout 2023 as a result of the current economic context, which boosts sales in the face of increased credit, the fight against inflation and the security of property as an investment."
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What will happen in Portuguese real estate in 2023?
At Alfa Inmobiliaria, its vice-president believes that in 2023 there will probably be better offers and lower prices to buy, but also many families will find it more difficult to access a home loan, and interest will certainly be higher. "This price drop may be for a short period of time," he points out.
He recommends that, especially in the case of those people who are thinking of resorting to fixed-rate home financing, it is better to buy now, although it is probably possible to find slightly lower prices in a few months.
According to Casavo analyses, the rise in housing prices due to the influence of inflation will be offset by the measures promoted by European institutions to combat this economic climate, giving rise to a very positive scenario in the medium and long term. "Taking into account market movements, we foresee that the rise in interest rates will be accompanied by a slight increase in sales, as housing becomes a 'safe haven' in the face of uncertainty," he says.
The specialist considers, even so, that the development and growth in the number of sales transactions will be accompanied by a reduction in supply at the beginning of 2023. However, experts also consider that these are normal market movements that contribute to improving the dynamics that guarantee the industry's sustainability.
