Selling a house in the blink of an eye is attracting more and more Portuguese people. And the ibuyers (instant buyers), who have recently entered the market, are already strengthening their investment portfolio to meet demand. At the same time, these digital real estate companies, which guarantee the acquisition of a property in just over a week, are expanding their field of action in the territory.
Tiko entered Portugal last September with the forecast to invest 30 million euros in a first phase. “The results were so positive that we decided to increase this figure to 50 million,” said Manuel Holstein, responsible for technology in Portugal. In January, it was Casavo’s turn to make its debut in the country, immediately raising a capital of 100 million to acquire and renovate homes. According to Duarte Ferreira dos Santos, the Portuguese face of Casavo, “in this launch phase we have already completed more than 40 house purchase and sales transactions” and “launch a first series of renovated apartments on the market”.
Sell&Go, the first player in this field to be active in Portugal (it started operations in September 2020), has already analyzed more than 2400 acquisition proposals with an average value per property of 190 thousand euros, says Francisco Belard, director of the company. As part of a business group with over 17 years of experience in credit and real estate management, FS Capital Partners, Sell&Go does not disclose how much it currently needs to invest, but assures that it has “financial capacity to act actively in the market and any seize the opportunity.”
Despite being a recent business model in the country – it has been around for over a decade in the US – its adoption in the country seems proven. The current context of the economy can further strengthen this business. Families are faced with rising interest rates and the cost of living, in a suffocation that can push them to move quickly. According to Francisco Belard, Sell&Go, which is only active in Portugal, evaluates about 100 properties every month. And Tiko, which is also active in the main cities of Spain, breathes optimism: “The first year of operation is really positive. We have received more than 4000 contacts from owners interested in selling their house,” says Manuel Holstein. . And he emphasizes: “The volume of demand corresponds to 30% of the transactions that take place in the cities where Tiko is present”.
solid and attractive
The interest of the Portuguese in these online brokers came from different parts of the territory, which caused a rapid expansion to the main cities of the country. Tiko initially bet on Lisbon and within a year expanded his action to Setúbal and Porto. And it doesn’t want to stop here. As Manuel Holstein says: “In our time horizon is undoubtedly the expansion to other cities, only in this way will we be able to respond to the requests of the owners arriving daily from different parts of the country”. Sell&Go started the company in Lisbon and Porto, but is now also active in the purchase of houses in Setúbal. Casavo, which started its activities in Italy and then entered Spain, began to focus on the more central and densely populated areas of Lisbon, meanwhile expanding its sphere of activity to peripheral areas of the capital. Soon it plans to expand to other Portuguese cities.
For these buyers, buying and selling houses in Portugal remains very attractive. For Duarte Ferreira dos Santos, high demand will continue, although a slowdown in the price growth trajectory is expected, due not only to the rise in the cost of living for families related to the current geopolitical context, but also to the rise in the Euribor rates and the new rules applied by the Bank of Portugal to mortgage loans. But he finds nothing that takes the firmness out of the market. The Tiko person in charge also believes that there will be no significant inversions in the company. As he states, a very large increase in supply was needed to achieve a price correction.
“We are aware of the current situation and our algorithm also helps us to monitor differences in supply and demand, to adjust our risk exposure,” says Manuel Holstein. Sell&Go admits that the current reality may force many families to take measures such as “going to live in the countryside, where the cost of housing is cheaper or even changing the house for a smaller one” and, in this situation, “the speed at which the house being sold is fundamental”. But “big changes in price drops” are not to be expected in Lisbon and Porto, where demand continues to exceed supply, Francisco Belard says.
Algorithm strength
These new business models are based on technology. The speed between submitting a sales proposal on the website of these companies and the presentation of the value because they are willing to buy, which varies between 24 and 48 hours, is due to the digitization of the whole process and the sophistication of the evaluations, based on algorithms, that take into account data from transactions already executed.
The seller should count on a discount from the market value, although ibuyers prefer to remember that they don’t charge commissions, cut the average selling time from six months to a week to ten days, and the whole process is comfortable and stress free. Once the properties are purchased, these technologies invest in renovation works and list them for sale on their website. Only Sell&Go uses a group brand, Nolon, to insure the sale of purchased homes.
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