The numbers related to the new records of Local Accommodation (LA) leave no doubt about the deep crisis that the sector is going through, as only 189 new units were opened throughout April, the worst result of the last 64 months, it is necessary to go back to September 2014 to find such a low dynamics, reveals the monthly report of May of the consultant Imovendo.
“This is just evidence of the lack of confidence that investors currently feel and that also reveals that the future expectations for Tourism in general, and for LA in particular, are far from encouraging, even with the programs that some city councils have. have already announced, as is the case with Porto and Lisbon ”, says Manuel Braga, CEO of Imovendo.
For the consultant, AL today has a quasi-toxic character, when it was seen, until March, as a highly profitable product.
“Those who bet on AL are now looking for alternatives, such as selling assets or placing them on the long-term rental market. Those who depended on it to dispose of the rehabilitated product, find themselves with devalued assets and less demand. Whoever thought of betting on it, withdraws now, as a result of the high uncertainty and risk that surrounds the sector ”, explains the person in charge.
On the other hand, although April allowed for a certain improvement in the real estate demand indicators, such as the recovery of the online demand observed, the players operating in the market anticipate an abrupt fall in activity in the second quarter, with the confidence indicator of demand for this period (INE) reached its lowest value since the beginning of the series (in March 2001).
The big question that only the next few months will allow us to answer is to know the extent to which the recovery that apparently lives in the real estate market today is not just the result of a “decompression valve” effect after more than 2 months of confinement, without sustainability over the next few months, and which will be subject to a gradual erosion effect due to real breaks in tourism international level, an increase in unemployment and underemployment and a greater demand from financial institutions in the scope of the granting of housing loans.
“It is likely that, as the deflation occurs, confidence will return, but the magnitude of the fall in confidence among professionals in the near future requires reflection on the best strategies to accelerate recovery and consumer confidence”, concludes Manuel Braga.