At a time when uncertainty prevails in the Portuguese real estate market, industry professionals nonetheless express confidence that the scenario in 2024 may not be significantly different from that of last months, anticipating a trend of continuity in most sectors.
This is one of the main ideas extracted from the latest Opinion Forum conducted by Vida Imobiliária in 2023. The forum challenged over a dozen experts from various sectors to share their hindsight of how the national market developed throughout the year and to outline the main challenges that will set the beginning of 2024.
The year 2023 for the commercial real estate market was largely determined by the global financial context, where the rise in inflation coexisted with the restrictive monetary policy imposed by the European Central Bank, resulting in successive increases in interest rates.
While the first half saw a higher investment volume compared to the same period last year, more restrictive financing conditions influenced a 40% decline in investment volume recorded in the cumulative third quarter.
Given that this dynamic occurred in all major European markets and market fundamentals remain, it is assumed that Portugal will remain competitive relative to other markets, continuing to attract foreign investment. In fact, focusing on the retail and tourism sectors, it is observed that they recorded higher investment volumes compared to the same period last year, largely due to excellent operational performance indicators.
Despite the current context, it is believed that the next year could mark the beginning of a new cycle, indicated by the signs of inflation slowdown in recent months. However, the 2% inflation target is expected to be reached only in 2025, which should be reflected in the investment volumes of 2024.
In addition to the global context, at the national level, significant challenges for the next year include the need for a stable government solution, crucial for continuing to attract foreign investment, and the need for an effective and streamlined operational response to address the housing crisis.
Overall, we believe that the beginning of 2024 will be challenging but with a positive outlook until the end of the year, characterized by the continued resilience of the retail and tourism sectors and the attractiveness of prime assets in the most consolidated areas.
Opinion article by Pedro Rutkowski, CEO at Worx, published in Issue 244 of Vida Imobiliária.
