By Catarina Demony, Patricia Vicente Rua and Sergio Goncalves
LISBON (Reuters) – When Maria Lopes moved to Lisbon from the northern Portuguese city of Tondela, her goals were straightforward: study, find a job, get a place of her own.
But a decade on, she still lives in a tiny, rented room – one of tens of thousands of young Portuguese hit by a housing crisis exacerbated by the arrival of richer foreigners lured in by incentives pushed by her own government.
Those incentives – including golden visa schemes for moneyed entrepreneurs – got a lot of the credit for attracting the investments that helped pull Portugal out of the 2011-2014 debt crisis.
Since then, critics say those schemes have come back to bite the economy by ramping up competition for scarce housing – fuelling inflation and piling pressure particularly onto young, local, entry-level workers.
“I want to live… I don’t want to just survive,” Lopes said after a shift at a hop-on, hop-off bus tour company.
The 30-year-old, who has two degrees in tourism, shares a flat with five others, pays 450 euros ($475) per month for a 13 square-metre mezzanine room, but makes as little as 800 euros a month during the low tourism season.
“I hope all this noise we’re making shakes things up,” she said, referring to a wave of discontent – protests, marches and petitions – driven by mostly young people struggling to pay their bills.
Living costs have been soaring across the world. But it is the stark contrast between the winners and losers that makes Portugal stand out among its European peers
Portugal ranks as one of western Europe’s poorest nations. But its capital was last year ranked the world’s third least financially viable city, thanks to its punishing combination of low wages and high rents.
Since 2015, Airbnbs and new hotels have mushroomed, foreigners have ploughed money into property and investment funds have bought up entire buildings.
“Lisbon became ‘trendy’,” Gonçalo Antunes, a housing expert at Nova University said. “The property market developed without any control.”
Rents in Lisbon have jumped 65% since 2015 and sale prices have sky-rocketed 137%, figures from Confidencial Imobiliario, which collects data on housing, show. Rents increased 37% last year alone, more than in Barcelona or Paris, according to another real estate data company, Casafari.
Locals struggled to keep up in a country where public housing only represents 2% of the property market, according to government data.
Antunes said the situation was particularly galling for the young.
Portugal’s monthly minimum wage is 760 euros ($801.27), and around 65% of those aged under 30 made less than 1,000 euros a month last year, according to the Labour Ministry.
The average rent for a one-bedroom flat in Lisbon is around 1,350 euros, a study by housing portal Imovirtual showed.
‘NO HOPE’
“Some people are not eating to pay rent… there are truly dramatic cases out there,” Luis Mendes, a housing researcher and geographer at the University of Lisbon, said.
The number of evictions has also been increasing, jumping 13% in Lisbon last year compared to pre-pandemic 2019, according to government data.
Young mother Dulce Dengue, originally from Angola, was evicted with her children and nieces from a poor neighbourhood in Lisbon’s outskirts in 2021.
They moved from hostel to hostel before finding a council house in Setubal, around 50 km south of Lisbon. Moving back to the city would be “impossible,” she said.
Some leave the city. Some stay with their parents. The average age people leave the parental home in Portugal is 33.6, the highest in the European Union, according to data from the bloc’s statistics office.
“It comes to a point in our lives that we have no hope,” said Vitor David, a 26-year-old programmer, who rents in Almada, across the River Tagus from Lisbon, where costs are slightly lower.
Mendes said a recent housing package announced by the Socialist government had some “bold measures” but would not lower prices in the short term.
As part of the package, new licenses for short-term rentals, such as Airbnbs, will be prohibited – except in less populated rural areas.
Rights groups have pointed a finger at the “golden visas”, which the government has promised to scrap. The programme has been giving foreigners residents’ rights since 2012 in return for investments, attracting 6.8 billion euros primarily into real estate.
A new “digital nomad” visa, which allows foreign remote workers making four times the minimum wage to live in Portugal for a year with no tax on external income, has also been widely criticised.
But even some of those remote workers are becoming increasingly aware of the housing crisis. Esmee, a 28-year-old from the Netherlands, lives in the coastal town of Costa da Caparica, across the Tagus, and pays 825 euros per month for her flat.
“Even for me – having an income from another country – it’s a lot of money,” Esmee said. “If housing stays this expensive or gets worse, (foreign) people earning a Portuguese income … will start moving back to their own countries.”
($1 = 0.9485 euros)
Source: Economy - investing.com
