At the national level, the latest results show that price declines continue to be driven principally by falling demand. Indeed, rising supply is not presently an issue, with new vendor instructions falling consistently this year.
The survey results also highlight that residential agents continue to experience much sharper price falls than developers. Moreover, this trend is not only apparent at the national level, but is also clearly evident in each of the three regions covered by the survey (Lisbon, Porto and the Algarve).The national picture masks some interesting regional variation, with market conditions in the Algarve holding up relatively well compared to Lisbon and Porto. Indeed, while prices and sales levels continue to fall across all regions, the pace of decline moderated in the Algarve but accelerated elsewhere.
Also, while price and sales expectations remain negative in all regions, they are least so in the Algarve.
RICS Senior Economist, Josh Miller said: "In Portugal, it is the demand side of the equation that is weighing down on prices, with the double digit unemployment rate feeding through to weakness in new buyer enquiries.
"Unlike in Spain and Ireland, oversupply is not an issue; the official statistics show no evidence of overbuilding prior to the economic downturn and new vendor instructions have been falling all year. Consequently, once the economy starts to recover, Portugal will not have to cope with the residential inventory issue that other countries face."
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