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.
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!
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.
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.
