Swedish property crisis bypasses Portugal

The number of homes sold in the Swedish market continues to decline, with 13,800 houses and 23,000 apartments sold between May and July, down 12% from the same period a year earlier, according to data from broker Svensk Mäklarsamfundet.

The crisis in the real estate market in Sweden has alarmed analysts, who recall the country's crisis in the 90s, which affected the financial system.

However, the situation in Portugal is quite different: "We are far from the mirror. Real estate is not expected to fall in the coming years," says Hugo Santos Ferreira, president of the Portuguese Association of Real Estate Developers and Investors (APPII), in an interview with Lusa.

Economist and ISEG professor João Duque, in turn, notes that the development of prices and transactions in the European real estate market shows that there is a negative trend since the fourth quarter of last year. João Duque explains that although there is still a positive trend in the overall European house price index calculated by Eurostat, comparing the data of this index with those of the previous year, it can be seen that in some markets there is already a significant negative change: Sweden -6.9%, Germany -6.8%, Denmark -6.2%, Finland -5.1%. "It is clear that there are markets where investor demand is still high, perhaps because of the lack of interesting and attractive alternatives or because of low price and high expectations of economic growth (Croatia, Slovakia and Slovenia, Hungary, Estonia, Bulgaria or even Portugal)," he notes.

On the other hand, statistics show that the transaction market is "slowing sharply across Europe," the economist said, citing examples: of the 14 European countries that provided data to Eurostat, 13 markets noted a decline in the first quarter, ranging from -50% in Finland to -8% in Bulgaria, with Portugal noting a decline of 25% in residential real estate transactions. "The environment is changing in Europe.

Joan Duque points out that "real estate investment in Europe seems to be in recession" because "in addition to the housing market falling in both prices and transactions, economic activity is contracting, which does not bode well for demand for commercial space or offices," plus "many companies may be aligning their operations with established telecommuting."

However, economist and New SBE lecturer Pedro Brinca despite noting, in an interview with Lusa, that "there is a correction in international markets", including Sweden, believes that Portugal is still an exception. "It doesn't surprise me that there is not a price correction in the same way as in countries like New Zealand, Canada, Portugal and others," he said.

Hugo Santos Ferreira emphasizes that the latest data published by the National Institute of Statistics (INE) indicates that "house prices [in Portugal] continue to rise despite lower valuations", a difference from Sweden. "We still have an unbalanced market where demand exceeds supply," he emphasizes, noting that "it is important not to let assets devalue." The APPII president believes that if assets start to depreciate, as happened in Sweden, which he does not expect to happen, there will be a decrease in household ownership, an increase in economic, financial and banking risk, and a reduction in foreign direct investment (FDI).

Despite the crisis in the real estate market in Sweden, Pedro Brinca believes that the country has the tools to overcome the challenge: "Sweden has the financial capacity to intervene in the sector to solve any problems in the financial sector, in addition, it has its own currency. This gives them other tools that Portugal does not have," he said.