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Market "must look into the measures which enabled the previous cycle"
24 April 2020 | Ana Tavares

As it enters its darkest stage, the real estate market must now plan its return to «pre-covid» activity levels. The measures to incentivize investment implemented after the last crisis might be «useful and necessary».

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This is the opinion of Ricardo Guimarães, director at Confidencial Imobiliário, who spoke to VI during the segment  Conversas Diárias – Especial Covid-19 (Daily Talks – Special Covid-19), noting that «there is a plausible prospect that the market can return to a healthy «pre-covid» threshold, whichever it might be». But it is necessary to «look into the measures which enabled the previous cycle. If they worked then, how useful can they be for a new restart? », he questioned.

The expert believes that it is fundamental to create «policies and an environment of trust, so that the potential of a «good day» for the market becomes a reality», especially in terms of real estate investment. The numbers from Ci show that, at the end of 2019, there were already signs of a slowdown and even drops in investment in the centres of Lisbon and Porto, which «is a result of the market’s natural cycle, the price level, but also the uncertainty the market was feeling in terms of regulation», in particular with the changes to the «golden visa» regime announced by the government.

Recovery in 12 months

According to the March edition of the Housing Market Survey, carried out by Ci, which tries to understand the market’s sentiment about the near future, operators revealed a «pessimistic expectation» concerning the present moment and believe that the market «will reflect the situation we are all living, with a strong reduction in terms of sales and business constraints».

However, and since it is also important to think in terms of long-term, it is important «to understand when the «covid crisis» will begin its end». The surveyed market operators believe the market will take around 12 months until the sales number reaches the same levels as before the pandemic, and around 14 months for prices to reach that same level.

Ricardo Guimarães explained that the market «cannot go back to the starting line as if nothing happened, but the operators’ expectation is that one year after the beginning of the crisis the market can go back to the same level».