Could a ‘smooth exit’ from the pandemic encourage foreign investment in Portugal’s property sector?

25smooth exitIs it possible for the Portuguese property market to luck out on a "clean exit" from the COVID-19 pandemic? The president of the Association of Real Estate Professionals and Companies of Portugal (APEMIP) believes that yes, it may be possible. Luís Lima bases his expectation on some of the information he has collected in recent weeks. "I have indications of what is perhaps one of the largest banks operating in our country, discussing information coming in from foreign citizens who are considering coming to Portugal, and that is extremely positive", he told press this week, to sustain the opinion that "if it goes well here, we will send a very positive signal abroad. I don't want to talk bad of countries like Spain or Italy, which are our direct competitors, but I think that real estate can help us", as happened in the previous crisis, in which the sector "pushed for urban rehabilitation and helped to recover the market".

Some international experts have highlighted the way in which Portugal is reacting to the new COVID-19 pandemic, leading President Marcelo to even allude to a "Portuguese miracle" to define how the country is dealing with the issue. The President of the Republic considers that the "miracle" is the result of "sacrifice". "If this is a miracle, the miracle is called Portugal," he added, in the statement announcing the renewal of the state of emergency until May 2nd.

The return of the old golden visa?

If Portugal manages to reflect this state in a period of favourable recovery, then Luís Lima believes that the real estate market may be one of the main factors of the economic recovery. Lima believes that it will be, for a second time, the property market that will pull the economy out of financial difficulties and thinks that, in the short term, the limitations placed on “gold” visas will have to be reassessed by the Government.

"At the moment I don't lose strength with that, but I think that within two months the topic will be on the agenda. I think that they should rethink the decision they made, because at this moment they might be sorry. In a few months the Government will not have another chance than to give all the conditions and use all the possible tools to try to attract investment. I hope the Government will welcome foreigners, and the money the golden visa requires them to bring for investment, because that helps to generate jobs in the face of this 'economic bomb'".

What about the rental market?

The president of the APEMIP also emphasizes that "something will have to be done, namely to boost the rental market, because that is where the real estate recovery will begin". House prices will fall, but Luís Lima says he sees "a price adjustment" with good eyes, expressing the hope that "correct market values ​​will be achieved and that it will not happen as at the time of the 'troika', with people losing their head and putting it up for sale at any price".

Lima challenges companies in the sector, however, to resort to credit lines approved by the Government, after weeks of talks, at a time when "80 to 90% of real estate companies are at a standstill and do not transact", namely because they are prevented from promoting visits and contacting customers directly. The APEMIP head, one of the more than 150 individuals who signed a document handed over to the Government requesting a plan for the reopening of economic activity, calls on António Costa's government to lay out when real estate agents can resume their normal activity, "and with what security conditions to do so".

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