Property investment in Portugal is expected to reach €3 billion in 2021, according to international property consultants CBRE.
The forecast was made during the digital event ‘The Next Normal: Reset to Change’ held on Thursday, February 11. The two-hour long event was seen by around 1,100 people and featured 15 guest speakers from several sectors.
“Despite the impact of the pandemic, interest in the (Portuguese) property market remains high, due to low interest rates and high financial liquidity on a global level,” said Francisco Horta e Costa, Managing Director of CBRE Portugal.
According to Horta e Costa, the Portuguese property market continues to show its strength and is “well-positioned for a quick recovery once countries start to emerge from this sanitary crisis”.
Still, CBRE Portugal recognises that the impact of the pandemic will cause an “abrupt fall” and limit the speed of the national economy’s growth, although forecasts show that the country’s GDP could reach the same numbers as 2019 by the end of 2022.
As the consultants point out, a “significant volume of investment in property in 2021” is expected.
Around €2 billion of property deals are “in the pipeline”, says CBRE, stressing that Portugal is ‘on the radar’ of the “international investment community”.
Meanwhile, the consultants also say that the investment capacity of “local players within the national property market” has improved significantly, while a considerable number of mergers and acquisitions deals could “boost the volume of investment” even more.
And while teleworking (remote working from home) is expected to reshape workspaces around the world, the work office sector is due to “remain resilient” thanks to “dynamic demand”.
The retail sector is expected to recover at different speeds, with shopping centres suffering huge losses due to the latest lockdown.
Regarding the tourism sector, CBRE says hotel chains and investors’ expansion plans are still in place in city and leisure destinations, although different segments will experience different levels of recovery.
Hotels “in areas with lower population densities” are expected to perform the best “due to the context of the pandemic, with regions like the Centre and Alentejo once again benefiting the most just like in 2020”.
Changes in tourist habits and safety requirements are also expected to bolster the growth of nature and well-being tourism, serviced apartments, boutique hotels and second homes in resorts.
Last but not least, the residential sector is also due to remain resilient.
Says CBRE, “the scarce number of new properties should guarantee a level of stability in the residential market throughout 2021, although there may be a slight drop in prices, which should be more significant among second-hand properties.”
The maintenance of bank moratoria for as long as the economic activity fails to recover consistently will also play a role in the stability of the sector, the consultants add.
However, the residential segments that rely the most on the foreign market will “continue to be the most penalised” by travel restrictions as well as the uncertainty surrounding the golden visa programme in coastal regions.