The Swedish real estate market is currently experiencing a decline in sales, with a decrease of 12 % between May and July compared to the same period last year, according to data from broker Svensk Mäklarsamfundet. This decline is accompanied by lower property prices and more expensive credit.
This Swedish real estate crisis is causing concern among analysts, who recall the 90s crisis in that country, which led to problems for the financial system. What about the Portuguese real estate market?
Portuguese Real Estate Market Resists European Downward Trend
In Portugal, however, the situation is different. "We're a long way from a mirror. There are no forecasts of a downturn in the real estate market in the coming years," says Hugo Santos Ferreira, president of the Portuguese Association of Real Estate Developers and Investors (APPII), in statements to Lusa.
Economist and ISEG professor João Duque points out that prices and transactions on the European real estate market have been on a downward trend since the fourth quarter of last year.
He explains that although there is an overall positive variation in the European house price index calculated by Eurostat, when comparing the levels of this index with those of the previous year, some markets are already showing a marked negative variation: -6.9 % in Sweden, -6.8 % in Germany, -6.2 % in Denmark and -5.1 % in Finland.
"Some markets are still attracting many investors, perhaps because of the lack of interesting and attractive alternatives offered by the conditions granted by local authorities, or because prices are still low and the prospects for economic dynamism are high (Croatia, Slovakia, Slovenia, Hungary, Estonia, Bulgaria or even Portugal)", he stresses.
On the other hand, statistics show that the transaction market is cooling rapidly across Europewith declines of up to -50 % in Finland and -8 % in Bulgaria, the Portuguese market recorded a -25 1TP3Q drop in housing transactions. Things are changing in Europe. The increase in interest rate demand, which is to be expected. The question is whether supply is willing to keep the property, even if it's vacant, or whether this condition or rising interest rates lead to a hasty sale," he points out.
Hugo Santos Ferreira points out that the most recent data from the National Statistics Institute (INE) indicates that "houses [in Portugal] have continued to increase in value, although there have been fewer valuations", which already represents "a difference with Sweden".
"There's still an imbalance in the market, with high demand and low supply", he insists, stressing that it's "important not to let asset depreciation happen".
The Chairman of APPII believes that if assets start to depreciate as in Sweden - which he doesn't think they will - family wealth will decline, economic, financial and banking risk will increase, and foreign direct investment (FDI) will decline.
Despite Sweden's real estate crisis, Pedro Brinca believes that the country has the necessary tools to face this challenge: "Sweden has, in terms of its budgetary position, the capacity to intervene in the sector to alleviate any financial problems, in addition to having its own currency. This gives it other means that Portugal does not have", he explains.