How long will Housing be a problem in Portugal?
It has been a theme in recent years and the tendency is for Housing to remain on the agenda. Unfortunately, for the worst reasons. For decades, the policies affected by the housing stock have not really been at the center of the concerns of the political agenda and Portugal persists, therefore, as one of the European countries with the lowest percentage of public housing. Current public housing policies continue to be insufficient to provide quick and adequate responses to the country’s needs and, as time passes, a situation worsens.
In July of this year, a study carried out by the Organization for Economic Cooperation and Development revealed that a Portuguese family needs the equivalent of 11.4 years of suffering to buy a house of 100 square meters, because the rise in prices is not accompanied by an increase in suffering. Since then, it has exceeded 10%, the highest value in the last 20 years, which results in an abrupt rise in prices, making it increasingly difficult to acquire a property. On the other hand, the implicit interest rate on mortgage loans rose, in October, by 18.4 basis points, settling at 1.328%. Euribor rates will continue to rise and an increase of 3% is estimated, which means that the average installment could increase by more than 90 euros by the end of 2023. In view of this scenario, families, both in the middle segment and the most needy, cannot support such high costs. If the yields are not compatible with the appreciated prices, what is the solution?
The greater the difficulties, the more necessary solutions and incentives for affordable housing are. In areas of greater urban pressure, of which Lisbon and Porto are the best example, responses are even more urgent, which is why it is necessary to join forces between society, the private sector and the public sector to make properties available to those who need them most. The Lisbon City Council presented a new service – As Minhas Obras -, an initiative that I applaud and that I believe should be restricted across the country, with the main objective of simplifying and speeding up simple works, thus mitigating the problem of licensing, which it delays the works and hinders the construction of housing.
In Porto, the Porto com Sentido program has existed since 2020, with the aim of increasing the supply of housing in the rental market and, at the same time, promoting the attraction and retention of inhabitants in the city through the recognition of houses with affordable income. If there are no measures to mitigate administration costs and the challenges associated with them, families will continue to have no answers and housing will persist as one of the major unresolved problems in our country.
Nuno Garcia, managing director of GesConsult