“The Market Seen from the Street”: UP, STABILIZES OR DOWN?

For the Portuguese version click here

Welcome to 2023!

January has passed fast but the doubts and uncertainties of the last quarter of 2022 continue.

Where is our market going? Is it still on an upward trend? Is it stabilized? Is it starting to show a downward trend?

I have heard and discussed these issues over and over again.

We live in a climate of "apparent uncertainty" and there are too many variables and transformations that do not facilitate our analysis.The opposite, it bring us even more doubts. However, it is important to note that it is not possible to analyze "the whole market in the same way". There are different asset classes that have different behaviors and dynamics. It can't be "All the same".

Anyway, in a light and uncomplicated way, more and more I believe that everything DEPENDS ON PERSPETIVES and INTEREST.

 Let's see why:

The Seller continues to say that the market will go up.

The Buyer states that the market will go down.

The Analyst understands that the market is stabilizing.

The Investor perceives a higher level of risk and increases his cost of capital.

The Developer believes that it is necessary to create Real Estate Products that give a reply to the needs of the market.

Banks raise interest rates to control inflation.

Inflation continues to run out of control.

People need homes.

Companies need offices.

Commerce needs stores and warehouses.

Tourists need accommodations.

The government raises taxes.

The Environment needs to be treated better.

This shows that each "Stakeholder" has its own interest. Each one has its own analysis. Each one presents his or her perspective. Are they all valid?

The best answer I can find to the title of this text is a round, DEPENDS.

This uncertainty in my view is one of the big market drivers.

There is no point in comparing Portugal with other countries. There is no point in finding justifications for some of the dynamics that we have observing. There's no point in comparing with data from the past. It is all new.

If I had to choose one word for the Real Estate Sector in 2023, I would choose TRANSFORMATION.

About 10 years ago I chose real estate as a professional activity and I thought I knew a few things. In fact, I didn't know anything.

Today, I can assume that the more I learn, the more I need to learn. I still know very little.

The transformation of the Industry is much faster than we realize. Are we living a "NEW AGE OF DISCOVERIES" in the Real Estate Industry?

I fully believe so, but it all DEPENDS ON PERSPECTIVE AND INTEREST.