Portugal has one the highest numbers of houses per inhabitant in the world. Over 40 per inhabitant. There are 700,000 empty homes in Portugal, not counting airbnbs and second homes. A country of 10,000,000 people.
From 2020 to 2023 there was an increase of 400,000,000 euros in international investment in the Portuguese real estate market. It literally doubles in 3 years.
There is a high number of houses that are kept as investments (empty, second houses, airbnbs etc.). This keeps the market hostage to an international investor class, who in every way but literally have infinite money.
This problem will keep getting worse and worse as long as the government doesn’t do something to fix the root of the issue.
Housing should not be a capital market to be speculated on. There should be no investors in housing.
Things people need to survive can’t be subject to market forces.
Homelessness and lack of housing affordability is exclusively an issue of neoliberal capitalism and the infection of every facet of our existence with “the market”.
I don’t disagree with the sentiment of your comment, but I feel it lacks some nuance.
First of all, where are those empty houses located? A lot of the pressure is in larger urban areas: Lisboa, Porto, Braga, Coimbra. If the houses are away from an urban centre, they might as well not exist.
Portugal also has a huge emigrant community, and it’s common for emigrants to have a house back in the home country, usually in more rural areas, but not always. These houses are a little retirement plan, and tend to stay unoccupied for months or years, only used when that owner goes to Portugal on holidays, or when/if they decide to return.While “nuance” can indeed be good, it can’t be based on vibes.
If we analyse the data, we know that more than 10% of the active real estate market is subject to international investment and speculation. And the majority of the active real estate market is in major urban centres (with a very big portion in Lisbon alone).
Amazon, when it was first starting out as a book-seller, made a realisation that if they controlled only 6% of a book’s sales they controlled 100% of the price.
If investors control over 6% of the active real estate market, they control the prices. International investors have much more capital than local Portuguese. Investors need prices to keep rising.
The outcome of the current housing crisis is not due to some Portuguese people owning one or two houses. It’s due to international investors buying properties to rent out on Airbnb and expecting their investment to keep rising double percentage digits every year. They might control only around 10% of the market, but they can control the prices with this.
Also, there are enough houses. Portugal doesn’t need to build more houses to solve the housing crisis. Not that building more houses is bad. But it’s not the best and cheapest solution.
The state can eminent-domain empty houses or force them to be rented out long-term. Ban Airbnb. Create laws that enshrine housing as a human right and not a capital market.
But I also support the state building more public housing. That is always good. Public housing ran as a housing co-op is perfect as well. But the state can just buy empty ones and put them under co-ops as well, and that would be likely be cheaper.
In Investment Banking it’s a well known rule that “prices are made on the margin” or in other words that the bulk of the assets on an asset type are rarelly traded and thus do not participate in the making of prices: it’s it only a small percentage of the assets of that type that get traded and is responsible for setting of prices for all the assets of that class.
This is more true for lower liquidity markets like housing (were most units spend decades without being traded) than in Stocksmarkets, so yeah, you only need to push a small percentage of the total housing market (a fraction of the small fraction that gets traded) one way or another to change the price of all houses.
Also if the will was there (which is not, IMHO, as the main secondary source of income of almost all top elected politicians in Portugal is “realestate investment”, even at the local level in the large cities) and now that the highest court has ruled that housing units in appartment buildings cannot get licenses as AirBnB business without the unanimous approval of all owners of all units in that building, a mere 2 measures would correct the problem:
- A requirement of being a Resident in Portugal to be able to buy residential realestate in Portugal, like various countries have.
- A massive program of building Public Housing.
The first would massivelly reduce Demand from foreign investors (whilst being within EU rules, as there is no discrimination between national and EU citizens as the rule applies the same to all), the second would increase supply and, as pointed above, as prices are made on the margin you don’t need to add that much of a fraction of the whole market in newbuilds to significantly change the price.
That’s true. If the public housing is numerous enough (and not relegated to the peripheries of the urban centers) and properly ran, it would likely have a faster impact on prices than any other thing. That’s how Vienna resolved a lot of their housing issues in the 20th century (then promptly forgot about the solution and abandoned it forever lol. Still Vienna is much cheaper to rent than most other major European cities…).
Good! More people around the world should protest the rampant price gouging by the land-owning class.
It’s not that linear here.
There aren’t huge corporations amassing houses and apartments here and asking insane rents.
This craziness started back in 2010, after the 2008 market crash. Interest rates were fairly low before the crisis and that allowed for many people to buy their family home. When the market crashed and interest spiked, many lost those houses but somehow most people endured the crash.
Next comes an historically low point for interest rates. Many people with some income buy second homes to rent and invest into air bnb. The market remains stable.
CoViD hits. And tourism, the biggest industry in the country crashes and does it hard. After the lockdown, our equivalent of air bnb was quicker to pick up due to individual tourist looking for that alternative.
When everything returns to normal, we get a flood of tourist and a new phenomena: foreigners looking to settle in our country to work remotely.
We are very affordable for the so called “digital nomads” so this drives up the rental market. Real estate agencies move up to control the rental market, promising ever rising leasing prices, which happens, has the market moves to fetch higher prices from foreigners that can afford it and to scare off other foreigners, often immigrants, with less money to rent.
Between a speculation wave and a populist wave, the nationals get crushed in a leasing market where private landlords feel they can extract a lot of money from sub par houses, often aged and with no appliances. Buying has become more difficult, due to higher interest rates and ever mounting prices, which foretells a bubble forming.
Oh, and an added nail to the coffin: the state has published tables with so called “affordable leasing prices”, for guidance of the landlords, but even those are ridiculous, with an apartment for the average 4 people family costing more or as much as one month of salary. The prices change from area to area but are nonetheless ludicrous.
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Portugal is popping off lately first the students suing over climate change now this.
Finally we’re on the news for something meaningful, and not for being the best destination for whatever.
Caused by wealthy foreign migrants or are there other factors? For some reason I’ve heard a lot of North Americans talking about moving to Portugal.
There is a great deal of backlash to the Golden Visa programs which were set up in Europe to boost foreign investment and skim more foreign money into government coffers. While it did result in some building and some influx, the impact has been wildly overstated.
Before I’m beset with angry residents, I’ll note that last year, there were 168,000 real estate transactions in Portugal, but there have been less than 10,200 golden visas granted via real estate purchase over nearly twelve years. That’s less than 850 real estate transactions year, on average, or around 0.5% compared to the 168,000 last year.
There are, I’m sure, edge cases where a large residential building was bought, renovated, and then resold mostly to foreign investors- I’ve seen the ads. But as a driver of housing rents I’m skeptical that such a low volume has been the primary driver of rent inflation. I’m seeing ridiculous rents everywhere, and I think it’s a combination of Airbnb-style landlords snatching up inventory for short term rental income (which no private renter can afford nor private buyer/homeowner compete) as well as the condo-bros leveraging their way into tens of hundreds of units for the passive income fad that has swept most of the western world.
On top of the golden visa there are also a lot of digital nomads, who earn a US salary, while living in Portugal. These types obviously don’t mind paying a rent value that is unaffordable for 95% of the population.
Then there were the tax incentives (quite literally “pay no tax” for EU pensioneers to move to Portugal, to the point that Sweden intervened on their side bacause swedish pensioneers were using it to pay no tax anywhere), the refusal to seriously regulate AirBnB which only ended when the highest court of the land finally got around to pass a ruling on it (saying that it’s unconstitutional to turn random appartments in appartment buildings into AirBnB businesses without unanimous agreement from all tenants, as has been done for over a decade, a rulling which by the way does not automatically revert all the licenses passed by city halls for such “conversions” and thus won’t revert those accomodations back to residential) and the lowest amount of public house building since the Revolution in one of the countries in Europe with the least amount of Public Housing, all the while housing construction in general is 1/3 of what it was 30 years ago.
Basically the realestate market has been manipulate by the politicians in power by increasing the Demand (the AirBnB thing was especially bad, with for example 10% of residential units in Lisbon being taken out of the realestate market and turned into tourist accomodation businesses) and keeping Supply at historically very low levels, all of which has pushed house prices up at around 12% a year all the while average salaries went up a few percent (barelly above inflation).
Even the so-called “support measures” by government now that the problem is way beyond the possibility of keeping on ignoring it (it’s causing more than half of young graduates to leave the country and even making shops close due to too high rents), are almost all on the side of propping up a crazy overvalued market (i.e. “giving people temporary help to pay” and “lowering loan criteria” rather than meaningfully increasing supply and cutting down on investment demand)
Of course realestate “investors” won massivelly from this, and guess what is the main secondary (sometimes primary) income source of elected mainstream portuguese politicians (especially members of parliament from outside Lisbon who get a “relocation subsidy” that covers whatever their rent in Lisbon) is…
The “funny” things for me is that this growing problem was already very visible when I moved from abroad back to Portugal almost 5 years ago: for example it was already cheaper to rent in Berlin than in Lisbon, even though incomes there are 2 to 3x larger. However the “quality” of portuguese politicians in general is such that there is no strategy and they only react to events and jump on the bandwagon, so only now that shit has trully hit the fan are they talking about it whilst pretty much having remained silent to all the (pretty obvious already back then) measures that were very all very visibly pushing prices up in what was already a clearly overvalued market.
That very well could be. I’d forgotten about the D7, though I don’t know how many people are using it. The real digital nomad visa just took effect so it hasn’t caused the problem, but I’ll bet there’s a shit-ton of British (mostly) who don’t even have to blink to get a short term annuity that meets the income requirements for a D7 in Pt. And they’re definitely willing and able to pay a above market.
It is probably a combination of wealthy foreign migrants and overtourism.
Portugal had been pushing visas for remote workers around Covid similar to how a lot of poorer cities and states have been pushing for remote workers to move in. Apparently it has been very successful, causing people to get pushed of Lisbon’s city center.
Portugal has also been selling itself as a way to get a cheap European vacation in the USA, which has also helped. I know United Airlines opened up a lot of flights from Newark to various Portuguese cities. Porto has become swamped with AirBnB’s as the city shifts to a tourism economy.
Given that Portugal has economic statistics similar to Eastern Europe, I can see this pushing out Portuguese from their cities and into Newark.
I was surprised to learn Portugal was so poor. I’d be curious to know the history there. They were a powerhouse during the colonial era, so it’s interesting that they didn’t end up wealthy like most other colonial powers.
This country isn’t poor. Far from it. What there is an ingrained mentality that we can’t do any better and lately this was topped with if someone has something or does something they are instantly villains, regardless of they are honest and decent individuals.
We have old money, really old money. Some nouveau riche and a few shit for brains top CEOs that open their mouths to spout idiocy.
Paired with a mentality of “good enough is not enough” makes the average portuguese complain the world is against them and anywhere but here is better. This results in massive waves of highly qualified professionals leaving the country that needs that same people to grow.
Oh, and those who stay? “stupid”, “crazy” and “idiot” are common terms to designate them, by those who leave and even more by those who will never do anything but complain.
Well, I can tell you from decades of personal professional experience as a portuguese who also spent most of his career working in other countries in Europe that the portuguese management culture is complete total crap. Similarly the business environments is very bad, with a few politically connected giants exploiting cartel or near monopoly positions acquired through such connections (for example, mobile networks in Portugal are more expensives than in Germany whilst salaries are between half and 1/3) and in effect acting as a anchor on the neck of the whole Economy, both people and companies.
Personally I think it’s because of the complete total dominance of cronyism and nepotism in the selection of people for pretty much any well paid positions as well as for things as simple as getting licenses from city halls for business operations (were you also get lots of corruption) - certainly the so-called “cunha” (getting a job through connections) is the main path to management positions in Portugal.
Last but not least, in general the style of working in Portugal is very very low on preparation, analysis, quality measurement of outcomes and in general any kind of well organised approach to working processes, so unsurprisingly the greatest strength of he portuguese workforce is the “desenrascanço” (which roughly means “last minute improvisation as a ‘method’ of doing things”). This would be ok if it was mainly the non-managerial professionals doing, but given the above mentioned selection “methodology” for management, the very people who are supposed to amongst other things organise work activities and environments “work” like that hence are very very bad at methodical, prepared, process-based work planning (lets just say that what in other countries are “known unknowns”, in Portugal are “unknown unknowns” and even some “known knows” elsewhere are “unknow unknowns” in the typical portuguese project, so extreme is the tendency to “dive in and figure things out when we get there”).
(Mind you, portuguese workers can learn to be organised and thorough whilst keeping their advantages as “highly-trained” improvisationalists, but if you’re in an environment were “everybody works like this”, that’s not going to happen, especially because things like preparation, analysis and setting up of quality metrics do not look like “doing work” to their managers, who will push them into activities with immediate visible outputs as that’s what looks like “work” to them.
All in all the country is not meritocratic (quite the opposite), is chained down by the incestuous relationship between politics and a few giant companies and thus pulled down by the dominance of rent extraction in the Economy and the dominant work culture (by a large margin) is improvisationalism.
Unsurprisingly the strongest growth sector in Portugal is one which bypasses most of this or suffers the least when it happens: “Selling the Sunshine”, a.k.a. Tourism.
PS: Mind you, in a big Historical prespective I would say that it’s still the Post-imperial period, as that seems to last centuries: just look at places which were long ago the center of grand empires - Greecy, Egypt, Italy, Turkey and so on - or look at the decay of Britain (the previous great imperial powerer) now and over the last 5 decades. I suspect there’s some kind of society-wide shift from a Doer mindset to a Taker mindset that isn’t easilly undone - certainly Portugal has at all levels a very entrenched mindset of “You’re a sucker if you don’t take advantage of the ‘System’ whenever you can get away with it” though fortunatelly and unlike certain countries, it’s not at all like that an interpersonal level.
https://giphy.com/gifs/empire-season-3-premiere-3x1-l2SpXzKHRREk2mXQc
Cada um pelo seu lado abordou ângulos diferentes da questão.
A lot of Europe’s wealth got earned during the Industrial Revolution. Portugal didn’t really participate as much as other nations did.
New constructions for habitation in Portugal over the years.
This, plus the fact that the last 30 years have seen an increase of 0 in real term for wages, plus a government that has done nothing over the best economic years we had from 2014 to 2019, and massive unchecked immigration(that has already received negative notes from the EU as illegal), and you have the ingredients for a nice habitation disaster, which is what this is.
Oh, and no effort to create good public transportation to connect cities to make reasonable living outside Lisbon. Or even try to push job creation out of the Lisbon district. And this is all before we talk about all the governmental decisions that have done nothing but decimate the renting market.
Speculation has its hand, but it pales in comparison to good old fashioned mismanagement of the state.
Unfortunately you could write this about virtually every western country and it would be accurate. There is a systematic rot at play here.
Very interesting! I visited Lisbon a month ago for a couple of days (yes I know I was part of the problem!) and I’ve rarely seen a city more overrun by tourists … definitely worse than Barcelona and probably on a par with Venice.
It didn’t feel like a city where normal people live and work (and we went quite far afield). Pretty sorry to see it in this state I hope they manage to sort it out.
This is the best summary I could come up with:
Several thousands of people took to the streets in Lisbon and other major cities across Portugal on Saturday to protest for the constitutional basic right to housing.
This is the second protest of the year that focuses on affordable housing, within a context of continuous increase of prices to rent and interest rates skyrocketing which has a big impact on most households due to mortgages.
In Lisbon, the impact of the climate crisis was also a common issue that some protesters wanted to highlight.
Portugal is facing in recent days high temperatures for the season, on Saturday thermometers reached at least 32 degrees Celsius in the capital.
Portugal is one of Western Europe’s poorest countries and has long pursued investment on the back of a low-wage economy.
Just over half of Portuguese workers earned less than 1,000 euros a month last year, according to Labour Ministry statistics.
The original article contains 301 words, the summary contains 147 words. Saved 51%. I’m a bot and I’m open source!
Better to prepare yourself by buying a beautiful reinforced tents, insulating tape and blankets. Our future is on the road.
I’m portuguese and I lack the words to properly express how that is so incredibly stupid, even to my countrymen.
There are more houses available in this country than there are people but the base line thought is if not in a major city, there is nothing.
Living in a small, semi rural area, there are more houses available than people here bit because this is inland, nobody wants to come here. Parents spend their childrens childhood indoctrinating them to leave as if fleeing the plague
Where there are no people, there are no businesses thus, no jobs, thus a dwindling population. This is a self enforcing cycle.
Exactly! Remote work available to more people would also help.
Cities are starting to feel all the same now, so I love staying rural, no food delivery, enjoying what each season brings, and buying less stuff. Cities are hot, full of cars and noise.
I’d take over an empty house before living on the street.
Don’t stop at your landlord. Eat your boss too.
This country is ripe for a rise in Marxist thought if played right. Good luck, Portugal.
The country has a Communist Party who are pro-Russia, put Party above everything else all the time, haven’t updated their slogans in over half a century and until not that long ago were Stalinists. They are quite literally dying as a political force as their supporters die of old age (and given Portugal’s relativelly high life expectation, you can imagine just how ancient most are).
Meanwhile the newest ecological party just went into a coalition with the mainstream Right and the convervative traditionalist Right (who are the leftovers from the Fascist days) in regional elections. I would love to hear how exactly Ecology is compatible with the kind of core policies of the mainstream and conservative Right, like the Consumer Society.
Meanwhile the supposedly Thinking Leftwing party is busy parroting the Liberals (i.e. neoliberals) of the US and UK (which are countries far more to the Right than mainland Europe and were those movements “strangelly” never worry with wealth inequality) and have no actual vision for a better Portugal, spending their time running in firefighting tactical mode running after the news (they’re led by people in their 30s with zero professional experience outside politcs). Also they’re painfully established middle class (the scions of well-off families) and most definitelly interiorized the whole idea that trying to get what’s better for you and those like you is fine, aka Greed Is Good.
Unsurprising the only growth you see in Portugal is an ultra neoliberal party which looks suspiciously like they’ve been launched with money from what Steve Bannon brought to Europe a few years ago for that (their launch marketing material stood out as done by the kind of real expensive international marketing company that a party that size can’t afford and they rely mostly of ex-finance types to front them) and a nationalist fascist-inclined populist party started by a guy who was in the mainstream Right party were he didn’t get any really big money-making sinecures, became a TV soccer commentator and then leveraged it to make a (surprisingly successful) far-right populist party.
Most of the parties with ‘Communist’ in the name are exactly what you said: dinosaurs from a bygone era that either abandoned Marxist thought decades ago or are Stalinist offshoots (the leader of the Portuguese Communist party frothed at the mouth to worship at the altar of BRICS, conveniently forgetting that BRICS is simply another imperialist approach to controlling the world economy to the benefit of a few wealthy individuals). Same goes for here in Canada as well. The name has brand recognition, but the Communist Party of Canada 1. Isn’t a political party really; and 2. doesn’t do anything beyond go to a few protests throughout the year. Hilarious.
There’s a ton of young marxists that don’t belong to these archaic parties though. In Canada, 1 million people under the age of 25 admitted to being communist last year. Seems like everyone is just waiting for a revolutionary force to develop.
