Since Portugal’s Socialist government presented its blueprint on ‘how to fix the country’s housing crisis’, the complex situation appears to have become increasingly worse: house prices have continued to increase; rental costs have skyrocketed; landlords reportedly spooked by some of the government’s measures have withdrawn from the market altogether – and there is now a crisis in confidence among investors.
Business portal negocios online ran the results of a poll by real estate company IMOVENDO over the weekend showing that 83% of buyers and sellers quizzed agree with President of the Republic Marcelo Rebelo de Sousa, who has vetoed the government’s Mais Habitação housing programme, calling for a rethink.
The trouble with the President’s veto is that it doesn’t appear to have changed a thing – with their absolute majority in parliament, PS Socialists have openly said they will not be changing a word of the policy, which they plan to put to a new vote, exactly as it is, some time before October – at which point the president will be duty bound to promulgate.
Where does this leave the negocios online view that buyers are “alarmed” by the situation in Portugal, while sellers are “desperate”?
“Confidence in the State has been lost”, writes the online. “Buyers/ investors have publicly assumed that they are no longer comfortable purchasing properties in the current economic context in Portugal, in a scenario of high interest rates and the expected coming into force of the ‘Mais Habitação’ programme”.
The three major ‘put-offs’ of the programme are the ‘enforced rental of vacant habitable properties’; limits on the rent increases, even on new rental contracts and suspension of new licences for apartments rented as Alojamento Local (short-term rentals, generally for holidaymakers).
In spite of the government’s mantra that it ‘won’t be changing a word of the document singularly reviled by every other political party, and all connected business sectors, it is clear PS Socialists are also not comfortable with the way things are going, either.
On Friday, reports described a letter, sent by the government to European Commissioner Ursula von der Leyen, asking for housing to be considered one of the Commission’s priorities, as it represents an “elevated weight on the income of families”.
The letter came in the context of other stories in which it was starkly explained that the inability of young people to secure an affordable roof over their heads has simply compounded the lack of opportunities across the board in Portugal for anyone with talent, trying to constitute a life/ a family.
According to Expresso, talented/ well-qualified young people are leaving the country for destinations where their qualifications will see them earning three times as much – and thus much better able to afford a roof over their heads.
Nordic countries, for example, are reporting “record entries of young Portuguese”.
The government’s letter to Brussels has consequently been seen as more of a ‘plea’, in the context that its ideological approach hasn’t a dog’s chance of ringing any positive changes.
“This is a problem affecting Europe”, the government stresses. “The solution has to come from Europe”.
Predictably, opposition parties have seen red – accusing PS Socialists of trying simply to ‘pass the buck’.
Iniciativa Liberal was first off the blocks on Friday, saying the government’s letter was “a form of admitting that the Mais Habitação package, which hasn’t even come into effect is an enormous failure that won’t solve any of the problems facing Portuguese people”.
All the other principal parties followed – even CDS-PP, which doesn’t even have a seat in parliament anymore.
CDS-PP’s concern is with what it calls the “totalitarian restrictions” the government is seeking to impose on people – and the way in which its ‘housing fix’ has provoked an almost instantaneous crisis of confidence across the board.
“Does Brussels even know what the Socialists are proposing”, wonders CDS-PP leader Nuno Melo, himself a Euro MP and thus in a ‘good place’ to air his party’s concerns.
On Monday, and prompted by journalists’ questions at the habitual press briefing in Brussels, the EU’s executive spokesperson for economic and financial affairs Veerle Nuyts said the bloc already offers housing support for Member States – on a case by case basis. The European Commission has not yet ‘analysed’ the PS Socialists’ letter, she added.
It has been left really to leader writers to give the historic overview of this galloping problem. Armando Esteves Pereira, the deputy editorial director-general of Correio da Manhã points out that “if António Costa had been in his job for just a few months”, it would be perfectly understandable for him to look at the dire housing crisis affecting families and young people in Portugal and ask for help. But he has been in charge of Portugal’s government since 2015 “and up until now, he has always pushed this problem forwards with his stomach” (this is not a direct reference to Mr Costa’s stomach; it is a standard Portuguese expression, translating in English into something like ‘putting the whole thing off’).
“In 2015, houses cost around half of what they cost now; interest rates were low; tourists had not yet invaded the principal cities and Alojamento Local was emerging. Years before, in the times of the Troika, houses even lost value and hundreds of builders went out of business, with some of the best emigrating.
“Without new constructions, with the interests of foreigners pressuring, the prices of homes have skyrocketed, and the government has been surprised by its inaction.
“The plea to Brussels is really the confession of the sin of Costa’s years in government”, concludes Pereira. The government has had years in which it could have been constructing social housing; instead it has been ‘promoting Portugal in the eyes of the world’, ignoring slow-burning issues on its doorstep until they came to the unavoidable boil.