According to idealista, "In the first nine months of the year, investment in commercial real estate totaled 1,050 million euros in Portugal, a figure that shows a drop of around 46% compared to the same period in 2022."

At issue are data contained in the most recent Market Pulse, from JLL. This is a decline due to the fact that there is “a more cautious attitude on the part of investors” and “a delay in the completion of many operations, a reflection of the growing uncertainty due to the macroeconomic and geopolitical framework”, says the consultant. This is, moreover, “a global trend that is also affecting Portugal”.

According to Pedro Lancastre, CEO of JLL Portugal, “the third quarter results are not surprising”, especially because “economic cycles affect the real estate market, and the end of the first semester already showed signs of a slowdown in transactional occupation and investment activity”.

“Although inflationary pressure is easing and the ECB did not raise interest rates at the last meeting, there continues to be a lot of uncertainty regarding macroeconomic developments and how real estate consumers, whether companies or families and banks will adapt. Naturally, this puts operators on alert and increases levels of caution, delaying decisions, reformulating plans and readjusting processes”, he explains, cited in a statement.

The person responsible also indicates that the feeling experienced in the real estate sector “predominates globally and not just in Portugal”. “Reflecting the path we have taken in recent years, we are a market with international exposure and are not immune to trends that affect capital allocation strategies. It is not a question of loss of attractiveness or fragility of our performance indicators”, he explains.

For Joana Fonseca, Head of Strategic Consultancy & Research at JLL, in offices and housing, above all, “the main impact of this more pressing environment has been observed in the loss of volume, with fewer transactions being carried out than on average in previous years”. “Valuation indicators, that is, prices and rents, have remained stable or even grown, with adjustments only in more secondary segments and locations,” she comments.

Private Parties

The JLL report attests that in the third quarter of this year, the sales prices of houses in Lisbon remained stable at 4,580 euros per square meter (€/m2). In Porto, the 3,020 (€/m2) represents a marginal contraction of 2% compared to the same period last year, says the consultant.

For Pedro Lancastre, the country continues to “face a serious problem of lack of supply, which supports appreciation levels at a time of declining activity”.

However, he warns, the “most worrying thing is that there are no incentive solutions to stimulate the growth of supply in the short and medium term, especially in housing, where the lack of properties has been the basis of the market's increase in price and restricted the access for many consumers”. “The creation of new supply has to be done by private parties, but conditions must be created for these investments to be implemented”, he argues.