According to the financial agency, the rent price boom - which is throwing many residents to the outskirts of Portugal’s big cities - is directly related to the millions of euros injected by foreign investors through a so-called golden visa program, which offers residence permits in return for a minimum 500,000-euro investment.
Foreign investors have pumped 4.3 billion euros into Portuguese real estate through the residency program since it began in 2012. Prime Minister Antonio Costa, who is widely expected to win a second term in an election next month, has signalled the country needs the incentives to continue to bring in money. Foreign Minister Augusto Santos Silva even called the programs a “sovereign right.”
However examples of the difficulties this program is accused of causing are everywhere. The agency spoke to a resident of Marvila in Lisbon, who had to move in with her mother after she could no longer afford to rent a property on her own. "Prices have skyrocketed," she said, pointing "across the street to a handful of housing projects around the neighbourhood."
According to Bloomberg, Portugal currently has the most dynamic real estate market in Western Europe thanks to tax incentives granted to foreign buyers and the golden-visa program. City dwellers, in turn, have become “collateral damage” to the country's need to attract capital from abroad.
Lisbon has become a “magnet for tourists in Europe,” says the financial agency, referring to the numerous properties that are being renovated and converted into short-term rentals, usually “blamed for price increases” as they are directed to visitors who can pay more than locals.
"They can't afford to say no," says Portuguese tax inspector Tiago Caiado Guerreiro, quoted by the financial agency, underlining the fact that these incentives have helped transform cities like Lisbon by placing it on the "map of major tourist destinations ".
“Lisbon has never been better at renovating its buildings,” says Francisco Bethencourt, a history professor at King's College in London. “The number of vacant buildings has been reduced and some of the economic misery that existed in certain neighbourhoods is no longer there. However, this change has had huge social costs as the least-resourced residents are being pushed to the outskirts,” the researcher concluded.
