Investing Talks
Name: Ricardo Guimarães
Biographical note:
I started my career in banking at Deutsch Bank in 1995 as a courier. I left after 12 years, as Partnership Banking Coordinator, to set up my own business in personal finance. In 2014, I founded Doutor Finanças, a fintech in the area of financial wellbeing to help people make better financial decisions.
I have a postgraduate degree in management and leadership from AESE and I honed my leadership skills at the Nova School of Business and Economics.
Let's start our conversation by finding out a bit more about Ricardo Guimarães' history and career: childhood, youth, first steps in his professional career, first dreams...
I was born in Porto and it was in Porto that I studied economics at the FEP in the early 90s. It was also in Porto that I had my first professional experience, at INE. I was involved in a project to develop a new statistical system for the residential market. It was an experience that, as you can see, marked me for life, as I worked with very competent and qualified people. To this day, INE is still producing information as a result of this project for which I was operationally responsible.
How did Confidencial Imobiliário magazine come about?
Confidencial Imobiliário magazine was born in 1988, a time when the market was very different from today's reality. It was born by a retired Navy Commander who came to work in the property market and felt the lack of "navigation indicators". He therefore began to collect data from estate agents in order to obtain statistics on market values.
He was a visionary in the sense that he realised that it was important for the market to "navigate" in an environment of transparency and information exchange. The magazine's mission is to promote professional transparency and confidence in the market based on information. At the time the housing price index was launched, it was the oldest price index in Europe with over 30 years of data, and is even an international benchmark, cited by the European Central Bank and the Bank for International Settlements.
It was with my partner António Gil Machado, who produces the magazine Vida Imobiliária, that we decided to buy the magazine Confidencial Imobiliário with the aim of continuing the statistical production that was being done and deepening it with new information systems that we have been launching, especially the SIR.
"Our information systems depend on our own customers"
How would you describe Confidencial Imobiliário's mission as a market analysis company and what is the company's vision for the coming years?
Confidencial Imobiliário has become a benchmark for property market operators. We have been fortunate and able to build a robust information system, but above all it is based on the trust that operators have in our activity, as we work with data from actual transactions sent to us by the companies.
Our vision for the future is that the market has to be more professional, because what we're looking for is more robust data on a micro scale that enables informed decision-making. Our vision is that artificial intelligence should be at the service of operators and should not compete with operator activity. The aim is to reconcile technological evolution with management by each operator and not depend on tools that process this data.
How does Confidencial Imobiliário magazine collect and analyse data to provide accurate information on the property market?
As mentioned above, we are proposing to property companies, developers, banks, etc. that in order to have access to information on transactions, they must feed the database with information on their own activity. The CRS is a closed-loop system, only those who participate can access it. It's a system based on operators' trust in Confidencial Imobiliário, providing a statistical system on actual transactions in the market and not on values that are on the portals based on expectations of each deal.
What are the main trends you are currently observing in the Portuguese property market? Do you expect the price rises we've seen in recent years to continue? Or do you think there will be a flattening of the short term?
The residential market worked very much at a discount. There has been a change on the supply side, for example in the redevelopment of city centres, premium locations. And on the demand side there has been a big change with the opening up to international markets. There has been a complete revolution in the property market in the last 10 years.
At this point the market is more mature and the margin for appreciation is smaller, but compared to other countries we are still one of the cheapest. The redevelopment of the area has helped prices to rise. It's natural that in this context of inflation and high interest rates, what may happen is that the pace of price growth will soften.
What are the main challenges facing Confidencial Imobiliário in the specialised publishing sector? In an increasingly fast-food world, is there still room for in-depth analyses?
Confidencial Imobiliário was an isolated operator in the context of the production of intelligence in the sector. Today there are more sources in the market and this is good, as it helps to strengthen a culture of access to data in the market. It's also important to work well with the data so that it's useful for the sector and not try to find "news" for the press. What is news is usually the anomalous, but the normal, of course, is not.
We have a vocation to serve market professionals and we think this is the right way to go, because they are the ones who can provide the richest mediation by using information in a professional and useful way.
Does Confidencial Imobiliário work with data from countries other than Portugal? If so, how do they observe the particularities of each market? Do national metrics echo those of European countries? Is there a country that we can consider as a mirror of our own?
Confidencial Imobiliário does not work with data from other countries. Our main capital is trust and this is a very difficult asset to build. Thank you for being so close to the operators. It would be difficult to set up our procedure for collecting data from operators in other countries.
There are countries with more detailed and richer public information than Portugal and the difficulty in Portugal in obtaining this information is an opportunity. We have international clients who tell us that the data we provide in Portugal is better than in their home countries. Being a private operation forces us to improve and develop our tool in comparison with public organisations.
What are your expectations and forecasts for the property market in Portugal over the next few years? Do you expect a slowdown in demand for investment property or do you not see it that way? What about the rental market? Do you think that the Mais Habitação (More Housing) package recently approved in Parliament will bring results in the short, medium and long term?
The Mais Habitação (More Housing) package is an attempt to respond to the collective feeling of difficulty in accessing housing. It's true that there is a housing crisis, but it's very asymmetrical. Two thirds are homeowners and don't have a mortgage. Then we have a third who either have credit or are in the rental market, and even those families who have credit have an average debt of 63,000 euros. In other words, we need to characterise the existing scenario well in order to design the measures, and in my opinion this is one of the main problems with Mais Habitação.
The sense of urgency of Mais Habitação also creates conflict between landlords and tenants, thus fostering an environment that is unsuitable for the market to function. One of the consequences of this package is a reduction of around 30% in the supply of properties on the rental market and an increase of also 30% in rents. So far, in practice, the Mais Habitação package has produced less housing on the market. We need to better analyse each measure and its impact. I propose analysing other countries and the policies they have adopted.
What role has technology played in the evolution of Confidencial Imobiliário's work? What risks does Artificial Intelligence pose for specialised publications like CI?
In fact, AI will be increasingly present in our lives. We must be subject to the benefits and challenges that arise from the emergence of AI. We must use it to strengthen industries and the role of operators in the market. In real estate brokerage, the intelligence should help operators to better understand global and local market trends. The market, being very asymmetrical, will become richer with AI, but the question of the human knowledge and experience of each operator cannot be left aside. There are areas where AI will have an impact, in valuations, for example, but there will be times, in highly liquid and homogeneous markets, when less human intervention will be needed, but in niche and asymmetric markets, this intervention will continue to be very important.
What are the main performance indicators that CI analyses to assess the health of the property market?
We have an information system called SIR, which monitors properties from the moment they enter the market, i.e. when they are put up for sale until the day they are sold. So we have the whole cycle of the property on the market. This gives us access to important indicators such as price levels, the time it takes for properties to be absorbed by the market, discounts and we also have an indicator called GAP market value, which is the difference between the average price of the property that has been sold and the average price of the property that is for sale. We can see the gap between actual demand and available supply. It's also possible to analyse other indicators such as the percentage of sellers who are lowering their price by analysing the stress in the market. There is a panel of indicators that allows us to monitor the sector.
How does the company work to maintain the confidentiality and security of customer data and market information?
Confidentiality is an essential premise in our work. If we want to build a system based on real transaction information, confidentiality is always an important pillar. In addition to anonymising data, we also take statistical confidentiality methods. We work with street-level data, but we don't deliver statistics at that level. To overcome this issue, we identify properties by 7-digit postcode without identifying the parties. These limits are sacred to us.
What criteria does CI consider when selecting partners and data sources to guarantee the quality of the analyses?
Our information systems depend on our own clients. We have representatives from large property networks, who provide us with a large volume of data, but we also have niche clients who provide us with very important and detailed data. We also listen to property developers. With this system we have players more organised and make better use of the data they have worked on, always guaranteeing its quality.
In your opinion, what added value does Confidencial Imobiliário offer the property market compared to other companies?
We have managed to secure detailed and very fine-grained information systems in terms of output to support market analysis on a local scale, but we have also been able to take a macro view and produce a set of analyses that follow the market from the point of view of trends, market sentiment, etc. We have been able to work with both information and trends in such a way that we are seen as specialists by all the partners, thus helping everyone's micro decisions.
What are Confidencial Imobiliário's future plans for expanding its services or exploring new opportunities in the market?
We have plans to expand our services to try to cover more market segments related to the real estate. We are always looking to go one step further. We are in a position to improve, innovate and respond ever better to the information needs of the different profiles of our clients. players of the property market, that's what drives us.
What are your long-term plans for your career? Do you see yourself in this publishing project for many years to come? Do you see this context of constant uncertainty as a problem or an opportunity?
I've been lucky enough to have a very long career as a director and partner of Confidencial Imobiliário, but as we are always reinventing and improving, I feel that even though I'm in the same position, I'm always doing different things. At the end of these 16 years at Confidencial Imobiliário, I'm very motivated by all the projects we've launched, some of them successful and others unsuccessful, but that's part of it.
What was the most challenging project you've ever worked on and why? Would you like to share a specific aspect of that challenge?
The challenges we've overcome is gaining trust. In particular, I would highlight the information system we launched with the banks in the middle of the financial crisis. This information system monitors the properties owned by the banks that are for sale as a result of bad debts. It seemed like an ambitious project to achieve, but at the end of the day it was possible to get the banks to share information through us. It's an example of how we have to remain resilient and resist until the expected results are achieved.
Do you have any questions for the stakeholders in the property sector and for all the readers of Investing Talks at Invest 351?
The big message that the market needs as a whole is responsibility and to be critical. Let the market's success always be collective and a factor in promoting cohesion. Confidencial Imobiliário has been taking steps to help interpret and outline strategies for market cohesion with public authorities.
The market has the capacity to help meet needs from all quarters, both for those with greater purchasing power and for other demand segments with less purchasing power and for young people who are critical to social balance.
