How is the market in Algarve and Portugal?
Enquiries pick-up in September
Demand indicator strengthens
Sales outlook improves slightly
Algarve results softer than the headline average
The September 2018 RICS/Ci PHMS results show demand rising over the month, having been relatively flat in both of the previous two reports, with confidence in the sales outlook also improving slightly.
That said, the latest figures point to the Algarve displaying weaker trends than those at the headline level, as demand continued to soften and sales reportedly fell in the region. In the lettings market, strong tenant demand and a lack of landlord instructions continues to drive rents higher.
Starting with the sales market, new buyer enquiries increased for the first time in three months during September, with a headline net balance of +21% of respondents reporting a rise. The regional breakdown shows a widening divergence between parts of the country, with enquiries continuing to fall in the Algarve while Lisbon and Porto saw positive demand growth. Likewise, the agreed sales indicator posted a net balance of -19% across the Algarve, whereas the respective readings for Lisbon and Porto stood at +10% and +15%. Looking ahead, however, all three regions do now display a positive outlook for sales over the coming three months.
The new instructions indicator remained in negative territory for an eighteenth successive month, with the headline net balance coming in at -11% (compared with -25% previously). The lack of stock being brought to the market appears to be one factor underpinning house price inflation, with all regions seeing further growth during September. That said, an aggregate net balance of +29% of contributors cited an increase in prices during September. Although still comfortably positive, this represents the most modest return since October 2016. Over the next twelve months, price expectations remain strongest in Porto, with a net balance of +74% of respondents anticipating prices to be higher in a year’s time across the region.
The National Confidence Index (a combined measure of near term price and sales expectations) posted the highest reading since May 2018, improving to +27, from +20 in August. Nevertheless, this is still below the average of +31 so far this year. In the lettings market, tenant demand rose firmly and new instructions fell back once again, pushing rental levels higher as a result. Respondents continue to envisage this trend continuing in the near term, albeit the pace of rental growth may ease slightly.
Source: Confidencial Imobiliário.