Economic and Monetary Summary

Throughout the month people expected a possible inversion of the Monetary Policy by the ECB, especially after the Central Bank of the USA implemented its 2nd rise of the year (interest rates between 1.75% and 2%) and indicated that it should make two more increases before the end of the year.
The announcement by Mario Draghi, President of the ECB, on 14 June of a reduction in the purchase program to half (€15MM from September and 0 at the end of the year) was therefore positive news for investors, given that it was accompanied by the forecast that the rise in interest rates, possibly in mid-2019, will be very gradual. This position was in fact confirmed in the ECB forum held in Portugal, in Penha Longa.
The monetary conditions for the good behaviour of the real estate sector were therefore maintained.

Bank of Portugal predicts stable GDP

The Bank of Portugal maintained its projection of GDP of 2.3% for 2018 and a slowdown in the following years to 1.9% in 2019 and 1.7% in 2020. However, taking into account an expected cooling of the European economy, it lowered the forecasts for Portuguese exports in 2018 and 2019, in its Economic Bulletin for June.
Thus, the continuing stability of the Portuguese economy is helping to maintain investor confidence.

National Statistics – Real Estate in Portugal – 1st Quarter 20188

In the first three months of 2018 there were 40 716 transactions, 15.7% more than in the same period of 2017. The value of the sales made in this period exceeded 5.4 thousand million Euros, an increase of 25.7% over the first quarter of 2017.
These values are in line with growth in 2017.
The Algarve, Lisbon and the North had increases in volumes above the national average (>=30%) although the number is in line with general growth.

Indicators of the number and sale values of accommodation, national total, existing and new, 1Q2017 - 1Q20188

In the first quarter of 2018, the Housing Price Index (HPI) increased 12.2% year-on-year, 1.7 percentage points (p.p.) above that of the previous period.

Housing price index, Rate of year-on-year variation, 1Q2013 - 1Q2018

There was also a further acceleration in the price of new buildings, bucking the trend of the last year and a half.

SIR Statistics - 1st quarter 2018

Lisbon: The number of new buildings on offer suffered a slight reduction in the 1st quarter, after growing in all quarters during 2017. In view of the increase in licensing requests it is accepted that the number of approvals is not accompanying the higher pace of sales.
The number of transactions, however, is maintaining the same dynamism as the previous year, with average prices in the used market growing at a faster pace than those of transactions in the "new" market.
In the total Metropolitan Area of Lisbon, this Database recorded 12,700 transactions
in the last 12 months against 11,000 in the same period of the previous year, with the most significant growth in percentage terms of the "new" market in Lisbon (+60% vs 10% in the "used" market) and "used" in Sintra (+30%). In terms of Typologies, the largest increase was for T1 in Lisbon (+100%).
In terms of the prospects for operators in the market, there continues to be a reduction in the number of intentions to place buildings on the market, whether for sale or for rental and an expectation of price increases, especially in the rental market.

INE (National Statistics Institute) - Licensed Buildings with an increase of 2.0% and completed buildings with growth of 20.0%

In the 1st quarter of 2018, 5,100 buildings were licensed and 3,500 buildings were completed in Portugal. Licensed buildings increased by 2.0% over the 1st quarter of 2017, recording an increase of 18.3% over the previous quarter. Completed buildings increased by 20.0% year-on-year and +3.6% over the 4th quarter of 2017.
In terms of licensing for new constructions, all regions presented year-on-year positive variations, with special mention for the regions of the Algarve (+13.1%), Alentejo (+12.9%) and the Metropolitan Area of Lisbon (+8.3%). Regarding the licensing for the rehabilitation of buildings, all the regions presented negative year-on-year variations.
Growth (albeit timid) is confirmed. In spite of everything, on a national level, indications are for values of around half those of 2011/ 2012, in full financial crisis, and 1/7 of the "crazy" years of the start of the century.

 In the 1st quarter of 2018, 4,500 dwellings were licensed as new constructions for family residence, which corresponds to an increase of 29.8% over the 1st quarter of 2017, and to an increase of 12.7 p.p. compared with the variation registered in the previous quarter (+17.1%). All regions presented a positive variation over the same quarter of the previous year. The North region had the highest year-on-year positive variation in this variable (+45.1%), followed by the Autonomous Region of the Azores (+35.2%) and the Metropolitan Area of Lisbon (+32.4%).

Bank of Portugal: Housing loans maintain growth, but overall total remains controlled.

In the first four months of the year, the total credit granted reached almost 3,000 million, with the month of March marking a monthly record since 2010 of 876 million.
The total balance of outstanding loans continues to reduce as lower interest rates accelerate depreciation. The trend is for total housing loans to stabilise close to 99,000 million Euros.
Meanwhile, after a long period of increasing bank evaluations, in the last two months values have shown signs of some stability.
In terms of financing for “Home Purchase”, the most relevant segment in the group of housing loans, the implicit interest rate for all contracts was 1.053%, 0.6 points base points higher than what was observed in the previous month. In the contracts concluded in the last 3 months, the interest rate for this purpose of financing went from 1.556%, in March, to 1.557% in April.

Belgian Group SIS invests 200 million in old people's homes in Portugal

Through the family holding company, the millionaire Phillipe Austruy hopes to create a network of homes for the elderly in Portugal. The first 14 units will employ 900 people and offer a thousand beds from 2019.
Besides “student housing”, we are seeing investors increasingly bet on this niche, as there still is not a sufficiently diversified offer.

NEWS

RE/MAX Collection - Siimgroup sells the VIVERE Undertaking

This is a new and innovative undertaking, designed by the architect Sidney Quintela. Located in Carnaxide, with easy and rapid accesses both to the beaches of the Cascais Coastline and to the Centre of Lisbon.
The undertaking is based on the tenets of “To live is… to breathe tranquillity, enjoy family time, live next to nature and enjoy a prime location.
VIVERE is to live.
VIVERE is an undertaking that privileges comfort and elegance. Fantastic views over the Tagus and nature.
All the common areas of the undertaking were carefully designed to provide quality time to its residents: a children's playground with lounge, gourmet space with barbecue, ample-sized swimming pool with sundeck in the open air, equipped gymnasium and SPA for relaxing, and integrated landscaping.
This undertaking has an innovative concept in all the fractions: The Gourmet Veranda is an extension of the living room in the open air, a spacious zone of support for the kitchen and fitted with the infrastructures necessary for this.
The VIVERE comprises 44 residential fractions: 30 apartments T2, 10 T3, and 4 T3. All the apartments include a parking place in the garage and storage space.

Siimgroup in Motor Vintage

On 23 and 24 June (Saturday and Sunday), the Siimgroup was present in the second edition of the Motor Vintage, the largest exhibition of classic and top of the range cars in the heart of Lisbon, in Campo Pequeno.
From the most exclusive and rare vintage cars, to the top of the range cars that associate aesthetics and innovation, to models that have a strong historic and civil importance, various brands took part in the event, for all tastes of enthusiasts and those curious about this segment.
The Siimgroup was present, in a stand, with the brand RE/MAX Collection. The group also sponsored the VIP space of the event.