The October RICS/Ci Portuguese Housing Market Survey showed an increasing number of respondents reporting falling rather than rising prices with the headline net balance dropping from 45 to 52.
Weaker price sentiment is being driven by a combination of rising supply and falling demand. Indeed, the new vendor instructions net balance remained firmly in positive territory at +23 (though slightly down from +36 in September), while the new buyer enquiry net balance fell further to 30 (from 7 previously).
Survey respondents turned increasingly pessimistic over the short-term outlook for prices and sales. The price expectations net balance fell further into negative territory from 33 to 53, while the sales expectations net balance fell from +7 to 24.
In terms of the regional breakdown, the lowest price net balance was recorded in the Lisbon metropolitan area (-55), followed by the Oporto Metropolitan Area (-50) and finally by the Algarve (-42). However, price expectations were weakest in the Algarve region (-67), followed by the Lisbon metropolitan area (-54) and finally by the Oporto metropolitan area (-43). Finally, the results show that price sentiment was generally more negative amongst agents compared to developers; the national net price balance was 60 for agents, compared with 35 for developers.
CI Spokesman, Ricardo Guimaraes says: "Portuguese real estate agents and developers remain downbeat; survey respondents note that the recent approval of the Budget was not enough to calm financial market fears, which in turn is weighing on confidence in the real estate sector."
RICS Senior Economist, Josh Miller says: "The October RICS/Ci data shows that a combination of rising vendor instructions and falling buyer enquiries continues to weigh down on house prices. Given this supply/demand dynamic, survey respondents expect prices to fall further over the near term. Although house prices are expected to fall across all regions in the survey, particularly sharp falls are expected in the Algarve."