Market confidence index recovers somewhat after sharp drop in march

• Sales, enquiries and instructions down sharply
• Confidence index improves slightly but remains subdued
• Twelve-month price expectations stand at -5%

The negative impact of the Covid-19 outbreak continues to come through strongly in the April 2020 RICS/Ci PHMS results, with indicators on current activity as well as forward looking metrics still depressed. A downbeat tone to the results is also evident across the lettings market, with demand falling sharply for a second month in succession.

Social distancing measures continue to weigh heavily on activity, with a net balance of -56% of respondents noting a decline in enquiries over the month (broadly unchanged from a reading of -59% in March). At the same time, the volume of new instructions coming onto the sales market continued to fall sharply, evidenced by a net balance of -67% of contributors reporting a decline.

Agreed sales slipped for the second consecutive report, with the headline net balance coming in at -56% compared to a figure of -52% in the previous results. Looking ahead, a net balance of -49% of survey participants expect sales to continue to decline over the coming three months. That said, this reading is at least slightly less negative than that posted in March, when the net balance stood at -71%.

In terms of house prices, a headline net balance of -18% of respondents cited a decline over the survey period (identical to the reading posted last time round). With regards to the regional breakdown, price trends seem to be flatter in Porto for the time now, while outright declines are being reported in both Lisbon and the Algarve. Going forward, twelve month price expectations remain deeply negative at the headline level, with respondents envisaging a 5% fall in the year to come.

The National Confidence Index (a composite indicator combining near term price and sales expectations) returned a figure of -51 in April. This marks an improvement of 17 points compared with a reading of -68 in March, but still suggests there remains a high degree of caution regarding the near term outlook.

The impact of the coronavirus pandemic is also clear in the lettings market data. Indeed, tenant demand fell for a second month in a row, while a net balance of -64% of respondents now anticipate rents will fall in the coming three months.

Source: Confidencial Imobiiário

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