Vanguard’s CEO defended PRR’s investment in industrial construction. “We need to invest more in companies,” he told a consulting summit in Lisbon on Tuesday, organised by JE.
The Portuguese Real Estate Forecast Committee discussed the problems of the Portuguese real estate market at the consultative summit organized by Jornal Económico. Unsurprisingly, the lack of housing was at the forefront of the discussion, as explained by João Bogalho, CEO of the Portuguese Arrow Global Group, who considered it a structural problem. A view shared by João Cabaca, CEO of VIC Properties, who recognized the difficulty of “giving demand through supply.”
The director stressed that this problem has nothing to do with foreigners, “nor with irregular residents and golden visas.”
The developer said that if 500 luxury homes were put on the market, prices would inevitably fall and they would no longer be luxury. “I believe that the market works by itself,” says Joao Cabacá.
“There is no competition between developers because supply is so low,” said the CEO of VIC Properties.
Housing supply will not skyrocket overnight, meaning the problem of house prices being too high relative to Portuguese wages will continue.
“The reality is that there is a huge lack of supply and the processes are very slow,” said the CEO of VIC Properties, who believes there is no shortage of money to invest, and has even spoken of billions of euros to invest in more housing. For João Cabaca, reducing VAT on construction does not solve the problem of lack of supply.
In a panel where virtually everyone agreed on the housing shortage, Jose Cardoso Botelho, CEO of Vanguard Properties, added the shortage of construction workers to the problem. The situation today is more complicated than in the past because there are no human resources for construction.
“In the past, until 2008, we had 660,000 people working in the sector and today we have 300,000, and we have lost more than 50%, without any changes to the constructive terms,” said the CEO of Vanguard.
The solution could include manufacturing, said Vanguard's CEO, who acknowledged that it was “a long-overdue process, but I have no doubt that it is one of the paths.”
He then noted that “there is a very clear licensing issue” and “there is no visibility at all.”
The developer recommends directing PRR funds towards industrial construction. “We need to invest more in businesses,” he added.
Rebuilding with the room builds more homes but does not solve the problem because there is not enough building capacity to meet demand.
He said the only way to solve the housing shortage in the short term was through renting.
Rent is a short-term solution, but laws can't always change, and justice is needed quickly in cases of non-payment of rent. There has to be confidence in the market, said José Cardoso Botelho, who championed the Cristas law, which liberalized the rental market, and which was later changed, and which Vanguard's CEO saw as negative.
Francisco Lino Dias, partner at PLMJ, advocated legislative stability and legal certainty to attract real estate investment. “Investors, when making a decision, must believe that the variables in their decisions Action Plan The lawyer said.
The panel included Francisco Lino Dias, Partner at PLMJ; João Bogalho, CEO of Arrow Global Group Portugal; João Cabaca, CEO of VIC Properties; and José Cardoso Botelho, CEO of Vanguard Properties.
José Cardoso Botelho also advocated integrated projects (residential, commercial, services, schools, etc.).
Regarding the financial and procedural aspect, the real estate developer said that it is sufficient to “imitate what is being done in Madrid with Plan Vive.” [um dos principais objetivos do Plan Vive é revitalizar terrenos públicos subutilizados para a construção de habitação acessível]”, which the people responsible for this Spanish plan were invited by APPII (Portuguese Association of Real Estate Developers and Investors) to present to the current and previous government.
The main problem in Portugal is a lack of purchasing power, said Vanguard CEO. “We have a problem of labor shortages and low purchasing power,” Cardoso Botelho explained.
João Bogalho, CEO of Arrow Global Group Portugal, said his reality is characterized by the fact that there are many real estate assets in the Algarve, where buyers are partly foreign investors who do not rely on housing credit. In Lisbon, Arrow invests “in housing with controlled costs” as a way to provide a satisfactory response to society, but “also to have a place where our workers can sleep.”
João Bogalho also highlighted the lack of industrialization of construction.
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