GUIDA SOUSA
Coordinating Director
Director of DECISÕES E SOLUÇÕES
With house prices rising for four years in a row, there was speculation that Portugal could be experiencing a new property bubble and everything led us to believe that this would continue until the end of 2020, had it not been for the country and the world going through a health crisis never seen before, due to COV1D-19. Although recent analyses by the Bank of Portugal show that the real estate and construction sectors are showing signs of being the areas that have best survived the impact of the pandemic, helping to balance the health of the national economy, it is inevitable to think that they will not be affected either.
We are in fact going through an “egalitarian” crisis, which does not make great distinctions. A health crisis is obviously accompanied by an economic and social crisis. With the closure of companies and the consequent elimination of jobs, we are witnessing a drop in the income of Portuguese families, which naturally leads to a greater supply of houses on the market, with property values, hitherto inflated, showing a tendency to adjust downwards in the light of the law of supply and demand. This increase in the supply of houses on the market is already visible, with local accommodation being replaced by long-term rentals, with many owners seeing that there is no extra income coming in and being unable to meet the expenses that these properties entail.
But in order for the bubble not to burst, it is important to prevent property prices from falling out of control, below the fair market price, and homeowners from no longer being able to sell their properties at a price that will at least allow them to pay off the mortgage, trying to avoid returning their homes to the bank. It wasn’t so long ago that Portugal went through an unprecedented crisis, and in many cases the recovery is only now becoming visible. Unfortunately, we’re going to have to use what we’ve learnt from this recent past and find all the tools and advice we can so that, at a time that may seem desperate, we can make the best decisions that are financially positive for our lives.
This counselling exists and is available free of charge, the important thing is to seek it out from accredited professionals such as those you can find in all DECISÕES E SOLUÇÕES branches, located from the north to the south of the country and the islands, who will work together to find the right solutions for each situation. The Portuguese are resilient and once again I am sure that with the spirit of solidarity that characterises us so much, we will turn this pandemic into an opportunity to strengthen ourselves.
