In recent years, Portugal has become one of the most stressed markets in Old Europe in terms of housing. The structural shortage of supply and the swollen demand, driven in part by the foreign investment and tourism, have made the price of houses enter another level. In the last three years, the value of properties for sale has increased by 25% and rentals by 23%, according to JLL in the report. Living Destination. The rise in prices complicates access to housing for families in Portugal, where the minimum wage is 760 euros per month. The lack of product is the main problem of the Portuguese country. Currently, it has nearly 6 million houses and 90,000 would need to be built a year to solve the housing problem that the country is suffering from.
They are estimates from Rental Insurance Portugal based on the recommendation of UN-Habitat, which advises building between 8 and 10 homes per year for every 1,000 inhabitants. The figure would increase to 450,000 units within five years, which “in the medium term would achieve stability in the market and the long-awaited response to the housing problem,” explains Francisco Reganha, general director of Aluga Seguro. However, the reality is not that. The pace of new construction construction has slowed considerably in recent years.
According to figures presented by the company, in the last ten years five times less has been built than in the previous decade. Specifically, between 2000 and 2010, 520,000 homes were built, while in the period 2011-2021 the figure was reduced to 130,000 units. “The political power does not assume its responsibility or its obligation to provide this response to society. There is a lack of transparency when defining new policies and courage to discuss them with the main stakeholders who are the investors and owners,” criticizes the manager.
Forced rental
The Portuguese Government approved the housing law at the beginning of October, known as More Habitação, which – like the Spanish regulation – includes measures to control and update rental income, tax incentives and various initiatives to increase affordable housing. That last point becomes especially relevant, they say from Aluga Seguro, “if we take into account that stimulating supply is the only viable long-term solution to the rental crisis.”
Specifically, the Portuguese regulation offers two types of aid for the promotion of affordable rental housing: on the one hand, a line of financing and, on the other, the transfer of land and public buildings through the transfer of the right of surface, on the other. term of 90 years.
Furthermore, Portuguese law goes one step further than Spanish law and forces owners to rent out their empty homes. This last measure, one of the most controversial and criticized, affects those homes that have been unoccupied for more than two years. The State, ultimately, will act as a mediator between tenant and owner, collecting rent from the former and paying it to the latter. “The regulation has been rejected by the entire sector due to its interventionist nature and for acting with its back to the market,” denounces Reganha. The markets of Lisbon, Porto and the cities located in the coastal area are the most tense in the country.
