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Portugal's housing crisis: A tale of evictions and political confusion

Ken Browne in Lisbon

 , Updated 01:31, 26-Mar-2024

WATCH: Ken Browne explore the housing problems in Portugal

Portugal is experiencing a housing crisis where people are being forced from their homes because of high rents, homelessness is on the rise and solutions are muddled because of an inconclusive election. 

‌"My name is Patricia Caçapa. I'm 31 years old, I'm a lawyer, I have worked 50 or 60 hours a week for eight years and I've been evicted three times in eight years because landlords want to raise the price of rent."

‌CGTN Europe met Caçapa in Lisbon and she told us many of her friends are in the same situation.‌ "House prices are so high and salaries are so low," she said, explaining she now lives in shared accommodation with three other friends.

‌Lisbon house prices increased by 120 percent between 2012 and 2022, according to a World Economic Forum report. "It's really frustrating, and this is the normal situation," Patricia said. "The right to have a house is a constitutional right in Lisbon, but that's in danger. Now you have a lot of people sleeping on the streets and this is not...human."

Average rent in Lisbon is now just over $2,165 a month, while the minimum monthly wage is about $820, with rents increasing by over 30 percent in the past five years. 

If Caçapa, a successful young lawyer, can't make ends meet, then imagine what life is like for those on the minimum wage in Portugal's huge tourism sector. The housing crisis has brought anger and protests to Lisbon's streets and beyond and was a central issue in the recent elections.

Housing association pressure groups such as 'Door-to-Door' say there has been a systematic failure from successive governments to invest in and provide low-cost accommodation for those most in need.

Ken Browne has been in Lisbon to meet those hurting from high rental prices./ CFP
Ken Browne has been in Lisbon to meet those hurting from high rental prices./ CFP

Ken Browne has been in Lisbon to meet those hurting from high rental prices./ CFP

‌Their spokesperson André Escoval told CGTN Europe: "The housing problem in Portugal is dramatic. Portuguese families work and the salary they earn at the end of the month is not enough to pay rent or the mortgage. 

"Many young people are returning to their parents' homes. Many people, already in desperate situations, are living on the streets. They're living in tents all over the city and 2024 is already worse than 2023."

‌Escoval says the lack of public investment is key. "In Portugal we have just two percent public housing. The EU average is around 20 percent. Countries like the Netherlands, for example, have an average of around 30 percent."

Why is housing so expensive in Lisbon?

Demand is the simple answer. Lisbon and Portugal in general is a great place to live: 300 days of sunshine a year, great food, cultural hotspots, cheap cost of living relative to other Western European countries.

After the financial crisis in 2008 which hit Portugal hard around 2011, the state was close to bankruptcy and was forced into a fire sale of public assets.

A slow recovery came through a period of austerity including deep cuts to public services, and by relying heavily on tourism and foreign investment. Cities like Lisbon incentivized long-term stays making it easy for digital nomads and other expats to live, rent, and buy property, also offering lucrative 'Golden Visas.'

Then there are the many homes on short-term rent platforms like AirBnB. The number of overnight stays in Lisbon reached more than 11 million in 2019, about 20 times its resident population.

Young people my age have concerns about having children because we don't know if tomorrow we have a house to live.
 -  Patricia Caçapa, Portuguese citizen

What's happening with 'Golden Visas'?

A purchase of a property worth over $500,000 used to be enough to secure a 'Golden Visa' - residential status in Portugal that also allowed valuable access to Europe's Schengen area. One measure taken by former socialist Prime Minister Antonio Costa was to scrap this scheme, an attempt to cool the housing market and free up housing stock for Portuguese citizens.

The conservative opposition dismissed the measure as populist and ineffective. To find out more, CGTN Europe spoke to João Mira Gomes, a director at Henley and Partners in Lisbon which has dealt with Golden Visa clients for years.

"Let's say 5,000 people came to live in Portugal via the Golden Visa program over the past five years," he said. ‌"This represents a tiny percentage of the people looking for houses in Lisbon and in the big cities in Portugal. Then, the kind of property that wealthy entrepreneurs and Golden Visa applicants typically want are not necessarily the same as the ones that the average Portuguese person is looking for."

Gomes said it's difficult to put a value on the program because the Portuguese government hasn't been open with the numbers, but that it was overwhelmingly positive for the local economy.‌ "Malta is a very good example," he added.

‌"We were very close to the Maltese government in the set-up and design of the investment program in 2017 and Malta generated over $434 million of foreign direct investment as a direct result of the program - that was almost four percent of the Maltese GDP."

There were huge protests last year against soaring house prices in Lisbon. /CFP
There were huge protests last year against soaring house prices in Lisbon. /CFP

There were huge protests last year against soaring house prices in Lisbon. /CFP

What is the government doing?

A February 2024 article on the World Economic Forum website by Lisbon Mayor Carlos Moedas set out the government's plan:‌ "A multi-dimensional approach of short-term solutions and long-term investments backed by a six-year, multi-million-euro investment plan to help develop affordable housing in the city."

It includes over $800 million public investment. Lisbon City Hall says it has "built and renovated 1,500 homes for medium- and low-income people, compared with only 17 apartments per year in the past 14 years."

Subsidies for low-income families, housing cooperatives, and access to housing for public sector workers are all measures the local administration says are already in action, along with a 'Housing Hackathon' which invites the city's tech sector entrepreneurs to come up with "disruptive solutions."


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Election result complications

Now the housing situation could be complicated further by inconclusive elections.‌ Portugal's March 10 poll results ended in a hung parliament with the big two center-right and center-left traditional parties taking around 30 percent of the vote each and the far-right party 'Chega' ('Enough' in Portuguese) rising to almost 20 percent; quadrupling their seats.

Both established parties say they will not govern with Chega calling their ideas and policies "racist, populist, and demagogic." That means there is still no clear direction on the housing strategy, at least in the short term, and Costa's Golden Visa termination could still be reversed.

‌The uncertainty just adds to the anxiety for the future for many people in precarious positions like Patricia Caçapa.

S‌he explained: "Young people my age have concerns about having children because we don't know if tomorrow, we have a house to live. How can we do this with children? It's really a sad situation."

Portugal's housing crisis: A tale of evictions and political confusion

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