Nothing new for someone who has been in this market for a few years, but definitely interesting for someone who is experiencing a moment of uncertainty for the first time, as they will have the opportunity to understand that, in fact, the The real estate market is an imperfect market with its own characteristics.For real estate investors with a lot of experience and already used to these changes, it will be one more change of the many that have already happened. However, for people who resort to credit and need to buy or sell a house in the current uncertain situation, it can be a moment of great anxiety which can lead to a paralysis or anticipation of your decision. On the one hand, they create retraction because postpone or withdraw from the purchase or sale decision🇧🇷 On the other hand, they create dynamics because go into emergency mode (or even in a panic) and want to sell their property as quickly as possible before it’s too late. its property is uncertain, but the truth is that it is believed that it is getting shorter and shorter. Regardless of these scenarios, the market does not stand still, evolves differently and focuses on opportunities. After all, there are always people who have to make decisions due to an immediate need or who are not affected by the current situation. They are people who cannot wait for the cycle to change in order to move forward, and whether prices are rising or falling, they have to make their accounts, study financing possibilities, evaluate market opportunities and move forward with the transaction decision. If you are one of these people, know that there is a strategy to take advantage of real estate market cycles to get the best return possible, without taking risks when the market starts to go down. buyer.
The first cycle, the seller’s market, is what we have been experiencing in Portugal for about 10 years. It is characterized by a sharp imbalance between supply and demand: there is much less supply and much more demand, which causes a natural rise or maintenance of prices. Generally, the average demand resorts to financing to acquire properties and, therefore, the market manages to ensure a rapid turnover of transactions🇧🇷 Until recently, in Portugal, the average transaction time was less than four months, if you consider the moment the property enters the market, until the moment when there is an accepted proposal that leads to the property being withdrawn from the market. market. The seller’s market usually gives rise to a increase in the number of agencies and real estate agents, also because the number of transactions per year grows and remains dynamic in terms of speed and value, excellent indicators for the mediation that lives off the commission originated by the transaction.Read more: The challenge of standing out in a booming real estate market
The second, buyer’s market, and always speaking in a simplistic way, has the opposite behavior, that is, generates more supply than demand.causes a price downtrend and sometimes demand has greater difficulty in obtaining the desired financing. Create one increase in transaction time which, in the case of the Portuguese market, can translate into average periods above 8 to 9 months. As you can imagine, this type of market not very appealing for inexperienced real estate agents or unprofessional. After all, there will not be the ease of transaction that existed in the previous cycle, causing many people curious about this activity to move away. Naturally, this causes a decrease in the number of agencies and agents real estatebut highlights who are the true professionals of the activity because they can actually help people in a more difficult moment for those who need to sell.Read more: How many buyers will be able to pay a commission in Portugal?
The transition period between one market and another (generally slow) we call cycle change🇧🇷 Characterizing it in a simplistic way, it provokes a sense of market balance🇧🇷 But it is just a feeling, as the market continues to function, albeit more slowly, with absorption times ranging from 5.6 to 7.8 months. now, it will be interesting for those who bought a house in the last 10 years consider selling to be able to sell your home tendentially for a higher value that allows its added value. But instead of going back to buy, should lease and save your money to invest later, taking advantage of the tax advantage of the possibility of reinvesting capital gains for up to a period of three years, that is, you can rent and buy again when the market is potentially lower to take advantage of the price drop. Of course, this decision for those who invest in their own housing is not always easy, as personal life, convictions or the offer of rental values in the intended area will not always allow for such a decision. with financing conditions that can also complicate the acquisition decision, if you have very competitive conditions and spreads of the previous credit. always awakened or conditioned by a need of each person, and which has to be satisfied regardless of the uncertainty of the real estate cycle that one is experiencing. Therefore, if you really need to sell or buy a house, it will always be a good time because, above all, you will certainly have a good reason to do so. “Real estate is my life and my life is dealing with people.” Living in Lisbon and working in Portugal, Spain and Italy, Massimo Forte is above all passionate about real estate, a business that he considers to be from people to people. With more than 25 years of experience in the largest real estate brokerage companies, he is now dedicated to consulting, training and sharing knowledge as one of the biggest Real Estate Influencers in Portugal.