Wednesday, September 23, 2020

The Portuguese Real Estate Market in July

Porto, Portugal

Talk turned rather quickly last month from hopes of a re-emerging European economy to fears of a second wave or, somewhat more depressingly, whether we are still in the first. Governments are imposing localized lockdowns, imposing quarantines on travellers once again, and planning for what might be difficult autumn.

Corporate transactional activity in Portugal’s real estate market remained quite subdued, with just one significant transaction announced.  According to a report by the INE, the torrid pace of growth of the country’s residential real estate market had already begun to moderate before the pandemic hit. While total housing transactions reached €25.6 billion last year, a growth of 6.3%, that figure marked a significant reduction from 2018, when growth hit 24.4%.

As a direct result of the pandemic, rental housing costs in Lisbon experienced the most significant drop in a decade between April and June. During that period, rents in the capital fell 6.9% q-o-q and by 8.7% y-o-y, according to Confidencial Imobiliário’s Residential Rents Index (IRR). Nationally, rents also fell during the second quarter, dropping by 2.8%, again, the most substantial contraction of the last ten years. Even so, rents in mainland Portugal remain 2.4% above the same period in 2019.

In some positive news, several Portuguese banks, including Novo Banco, announced that they would sell a portfolio with 4,435 homes, worth a total of 360 million euros. The dwellings, most of which are currently leased to tenants, are primarily located in the city centres of Porto, Setúbal and Lisbon and are part of a set of real estate investment funds (FIIAH) managed by Norfin. The funds are owned by the leading Portuguese banks, including Novo Banco, Caixa Geral de Depósitos (CGD), Montepio, BCP and Santander Totta. In order to address a lack of supply of affordable housing, the Portuguese government led an initiative to allocate hundreds of properties in the social housing rental funds. In exchange for the properties, the banks received shares in the funds.

Hospitality

In mid-month, Mondego Capital Partners announced that it had acquired two buildings in Baixa, in the upscale neighbourhood of Chiado, Lisbon. The firm plans to spend a total of 20 million euros over the next two years on a new development aimed at the hospitality sector. The two properties have a total constructed surface area of 4,500-m2 and are expected to open in 2022. Mondego had previously announced that it would invest more than 100 million euros in real estate projects in Lisbon and Porto.

B-Exclusives

The Details of the 102 Residential Plots Being Sold by the Community of Madrid

The regional government is going to put 240 publicly owned plots up for sale, of which 102 are for residential use. The jewel in the crown is a plot spanning more than 32,000 m2 in the heart of the Salamanca district.

How Covid is Affecting House Prices: Map of the Decreases by District

The coronavirus crisis is causing house price decreases of up to 70% in some municipalities in Castilla La-Mancha, the Community of Valencia and Andalucía.

Property Developers Launch Large Urbanisations Post-Pandemic

Between April and August, work began on 996 developments in Spain with the ten largest comprising 1,691 homes. Of those ten, which are located in Madrid, the Basque Country, the Community of Valencia and Andalucía, four are being built by Amenabar.

Fearless Despite the Crisis: Property Developers Start Work on More than 27,000 New Homes Since April

Between April and August, work began on a total of 996 developments and 27,882 homes in Spain, according to data from the real estate big data platform Brains RE, with Amenabar, Habitat and Aedas the most active players.

Latest news

Metrovacesa Launches a Share Purchase Plan for its Land Subsidiary

The real estate firm is offering MPyA's shareholders 0.1152 euros per share in cash or shares in its parent company in the ratio of 143:1.

The State and Pryconsa Will Build 600 Homes on the Site of the Former Prison in Carabanchel

After several years on the backburner, the urban project to develop Carabanchel's former prison, where 600 houses will be built, is going ahead. The land has a surface area of more than 170,000 square metres.

Cataluña’s New Rental Law Entered into Force Yesterday

The new law that regulates rental prices in the 60 Catalan municipalities that have more than 20,000 inhabitants came into force on Tuesday.

The Pandemic Leaves the Sale of Shopping Centres Up In The Air

The owners of shopping centres are holding back on the sale of their large establishments due to the difficulties involved in agreeing prices between owners and investors.