The estate agency market - Portugal

1.1 Definition and scope of study

Real estate agencies are intermediaries that facilitate the reconciliation of supply and demand in order to allow market balance in the housing sector. Real estate brokers supervise negotiations between sellers and buyers or landlords and tenants.

Real estate agencies work for two types of clients:

• Residential customers : most real estate agencies cater to individuals looking to buy or rent houses, land or garages in urban and rural areas.
• Business customers : a minority (less than 10%) of real estate brokers focus on searching for commercial real estate - offices, industrial land, factories and warehouses or stores.

The activity of real estate agents is driven by the housing purchase and sale market, which has been on the rise since 2015, although this volume of activity is expected to stagnate in 2019. Real estate brokers face constant competition from the sale and rental of homes between individuals.

In a highly competitive market, the role of independent real estate agents is gradually diminishing in favour of franchises, which are better distributed and more visible. Competition from Internet tools, and in particular online platforms, weighed on the demand for real estate, although the proportion of property sales between individuals remained stable.

The Portuguese real estate market is one of the most dynamic in Europe . This is largely due to the various tax incentives for foreign buyers and the so-called golden visa program which grants residence permits to those who invest at least EUR 500 000 in the country. This context continues to favour the players in this market, even though demand has slowed down over the last two years. Despite this, short-term residence solutions such as Airbnb, Uniplaces and Spotahome are progressing and compete with traditional estate agencies.