The strong increase in prices of living place in Portugal, both buying and renting, is adding more pressure to families, already hit by the rise in inflation. The purchase price in the continental territory increased by 18.7% in December 2022 compared to the same period of the previous year, according to data from Confidencial Inmobiliario, a company specialized in the housing market. It is the largest year-on-year increase in the last 30 years in the country. In the case of rentals, the rise in prices has been more contained, although the average price per square meter in Lisboa it already exceeds that of other large European cities, such as Madrid.
The rise of the construction costs -derived from a shortage of raw materials- and the rise of the Interest rates are among the main causes of the increase in purchase prices. A situation that affects the whole of Europe, but that in Portugal is added to other particular problems in the national real estate market that have caused the rise in house prices to be more accentuated in this country than in the euro zone average. According to Eurostat data, this increase was 13% in Portugal in the third quarter of 2022, compared to the same period of the previous year, while in the whole of the euro zone that rise was 6.8%.
Foreign investment
This difference with respect to the European average is explained, in part, by the high interest of the foreign investors in the Portuguese real estate market, especially in cities like Lisbon and Porto. Upon the arrival of highly-skilled workers from countries of the Northern Europe and the United States -many of them digital nomads- is added to investment for purely speculative purposes, driven by the policy of golden visaswhich until recently granted residence permits to foreign citizens who bought property worth more than 500.000 euros anywhere in the country.
Despite the fact that the Portuguese Government limited golden visas to the purchase of real estate in less populated areas, foreign investment has increased in recent months. According to data from the Bank of Portugal, home purchases by foreign citizens in Portugal accounted for 11.7% of the total volume of transactions in 2022, almost three points more than in the previous year. A situation that has led to Left Blocka former parliamentary partner of the Government, to propose a law to prevent the purchase of homes in Portugal by citizens or companies that have their headquarters or permanent residence abroad.
empty houses
The imbalance between supply and demand is also affecting the rental pricewhich in Lisbon have increased by 36,9% in the last year, according to the company specialized in the European real estate market Casafari. The recovery of tourism after the pandemic has put thousands of accommodations back on the short-stay market, a problem that is added to the high number of empty houses in the city. The Lisbon City Council estimates that there are about 48,000 vacant properties in the capital, of which some 2,000 belong to the Consistory.
“There are many small owners who prefer to have an unoccupied property because They do not believe in the speed of justice in case of litigation”, explains to EL PERIÓDICO DE CATALUNYA, from the Prensa Ibérica group, the president of the Association of Real Estate Agents of Portugal (APEMIP), Paulo Caiado. “On the other hand, many unoccupied houses do not have the conditions to be inhabited, and many owners do not have the adequate resources to pay for the necessary works,” adds Caiado, who is confident that the injection of close to €2.7 billion of recovery funds European Unions for Housing Policies help solve the problem.
Public policy
But despite the efforts of the Portuguese government and local administrations to improve access to housing, for now no symptoms of a balance between supply and demand. Professor of Geography at the University of Lisbon Luis Mendes ensures that the measures of the Executive to attract owners to the rental market, through tax incentives, they have not worked. “The owners have a certain suspicion of placing the houses on the rental market because they do not trust the State. There is a narrative of not placing empty houses because they are afraid of the State taking administrative power, an increase in the tax burden and the instability of the laws”.
The first Minister, Antonio Costa, announced this week its intention to approve a new Housing Law, which will include the addition of more developable land and new tax incentives for owners to place their properties on the market. Some measures that will be accompanied by a largest public offering, according to the Minister of Housing, Marina Gonçalves. “We will only be able to respond to families by reinforcing the public housing stock”, she stated this week. The goal is to have the new law ready before the end of the first quarter of this year.