Deconfine Lisbon and Porto
Ricardo Guimarães, Confidencial Imobiliário Director
The most recent SIR data present a disturbing reality for the cities of Lisbon and Porto. If in the past they led the valuation and the pace of demand, today they are the scene of a retraction and a brake on prices.
In the case of the city of Lisbon, the market devalued by 0.3% in the first quarter of 2021. A reduction not expressed, of course, but which contrasts with the reality of the respective periphery, with 15 of the 18 metropolitan municipalities increasing, reaching a maximum of 5.3% in the municipality of Setúbal. Apart from Lisbon, they only devalue Cascais and Loures.
In the area of the Greater Porto region, for its part, Invicta is the city with the worst performance, despite being positive. It values marginally at 0.6%, a stark contrast to its surroundings, with Vila do Conde standing out, where prices rose by 3.3%.
In a complementary perspective, it is observed that the confidence of owners is greater in peripheral cities compared to the respective metropolitan centre. In an analysis developed for the most recent SIR Webinar, it was founded that, in the case of the suburbs, the owners who entered the market during the 1st quarter of 2021 put their properties for sale at an average value/m2 about 5% above those that they did so a year earlier, that is, they entered above the values of those already on the market. In the case of metropolitan capitals, the movement was the complete opposite, with new offers entering the market rounding 1.5% below the value of those that had entered the market a year earlier. This is a pattern that is observed both in the case of Lisbon and Porto.
Apparently, the pandemic brought along with it a paradigm shift in housing demand.
Prior to COVID-19, the centres were the space that everyone disputed. The emergence of a strong cosmopolitan spirit, the attraction to buildings dating back to historic times, as well as the search for plots with greater liquidity to invest, are causes and effects of the dynamics of rehabilitation and the price appreciation that has been verified. However, this model, as a result of pressure from rising prices, led to an offer cantered toward apartment buildings, many of which are of reduced dimensions.
In the context of the current crisis, the aspirational ideal of families points to larger dwellings, ideally houses, and, considering the emergence of solutions such as remote work, this ideal can be achieved in suburbia, less valued geographies, in places where public spaces are not confined due to the pandemic.
The impact of this new balance of transactions is not yet very visible, given the restriction of demand having to conform to the pre-existing supply. However, in the long term, it may become a factor that generates pressure for the reversal of the urban densification process carried out in recent years.
Of course, the evolution of the pandemic will dictate the duration of this source of pressure. The need for air is a basic survival instinct, but this new profile of preferences has negative counterparts that must be considered, both by themselves and by public decision-makers, as it has undeniably adverse effects from the mobility point of view, the need for equipment and economic and environmental sustainability.
It could be that everything passes rapidly and swiftly, we go back to the old normal and forget about all of this. That would be nice, of course. But forgetting it would be a mistake.
Sustainability was already a great challenge for cities. Public health joined it, both contributing to decisions in the same direction, nonetheless 100% convergent.
Cities that are friendlier to people, with qualified and attractive public spaces, structured with means of light mobility integrated with public transport and car parks, more "pedestrianised", populated with terraces and spaces of disorder and with greater integration between residential and commercial areas, they are imperative for your future competitiveness.
“Deconfine the Centre” must be the motto, promoting a new, sustainable, and irresistible ideal for families...
We all know that climate change will bring new epidemics that globalization will “pandemize”. To paraphrase Churchill: "May a good crisis never be wasted"...