Many Portuguese, including the middle class, are being priced out of Portugal’s property market by rising rents, surging home prices and climbing mortgage rates.
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.
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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