FORWARD-LOOKING INDICATORS TURN NOTICEABLY LESS NEGATIVE

  • Prices continue to fall modestly
  • Sales expectations significantly less downbeat
  • Tenant demand stable over the month

The May 2020 RICS/Ci PHMS results suggest that some of the negativity caused by the Covid-19 pandemic is starting to lift, even if sentiment towards the sales market outlook remains cautious. In the lettings market, a steadier trend in tenant demand appears to be coming through, although rents are still expected to remain under pressure in the near term.

Focussing on the sales market to begin with, the new buyer enquiries indicator remained in negative territory for a third month in succession. That said, the net balance did move upwards from -56% in April to -19% this time. At the regional level, the net balance readings for new buyer enquiries stand at -12% in the Algarve, -13% in Lisbon, while demand conditions remain a little more downbeat in Porto, posting a net balance of -36% in May. Alongside this, a net balance of -26% of contributors report a continued decline in new instructions at the headline level over the month.

Meanwhile, agreed sales are still displaying subdued momentum, with the latest net balance coming in at -29%. Even so, this again represents a less negative figure than in April, when the net balance stood at -56%. Looking ahead, near term sales expectations are much less downbeat than last time out, evidenced by the net balance improving to -12% from -49%.

The national confidence index again showed some signs of improvement as a figure of -22 was registered in May. Although this latest return remains in negative territory, it is up from -51 previously.

In the lettings market, respondents report that demand has stabilised following a downward pattern seen in each of the previous two months. Nevertheless, rents are expected to continue to fall for the time being, albeit at a decelerating pace.

Source: Confidencial Imobiliário

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