Further deterioration in Portuguese property sales but rental market more resilient

There was a further deterioration in demand, supply and confidence in the Portuguese property in October but the rental sector is proving more resilient.
The latest Portuguese Housing Market Survey from the Royal Institution of Chartered Surveyors and Confidencial Imobiliário shows that the National Confidence index fell from -53 to -60 and the National Price balance improved marginally from -65 to -64, but remains deeply negative.
Price declines continue to be driven principally by falling demand, the report says. ‘Indeed, rising supply is not presently an issue, with new vendor instructions falling consistently this year,’ it adds.
Until September, developers had generally been less negative than agents. However, the October survey provides further evidence that developers are now becoming less resilient to adverse market conditions and for the second consecutive month developers reported roughly similar price expectations and falls in prices.
The survey’s coverage has now been extended to the rental sector, which appears to be benefiting from ongoing weakness in the sales market. At the national level, demand for rented property and new lettings instructions both increased sharply, though rents declined. Respondents expect further falls in rents but continued strong rises in lettings volumes.
At the regional level, house prices and rents are falling across Lisbon, Porto and the Algarve, but the sharpest falls are being recorded in the latter. However, rental transactions are also expected to increase fastest in the Algarve. (PropertyWire)