Chairman and Chief Editor
Bedour Ibrahim

The country grapples with rising property prices

Portuguese Are Fed Up With Incentives for Foreign Home Buyers

Saturday 07/January/2023 - 06:54 PM
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Pressure is mounting within Portugal to cut incentives for foreign home buyers as the country grapples with rising property prices and a shortage of affordable housing. 

A survey commissioned by weekly newspaper Expresso found that 90% of respondents agree that Portugal is in the midst of a housing crisis. With outside demand continuing to drive up property prices، more than half of those surveyed say they want the government to roll back incentives for foreign buyers. 

The poll، which was carried out last month by ICS and ISCTE university institutes and questioned more than 800 people، took place after home prices rose 13% from a year earlier in the third quarter، according to the country’s statistics institute. That’s the second-biggest increase since the institute started collecting data on the housing market in 2010. 

More than three-fourths of those surveyed blame the crisis on a lack of public investment in housing، insufficient regulation and a shortage of available units. Some 64% said that incentives for foreign buyers، such as the so-called “golden visa” program that grants foreign nationals a residency permit in exchange for a real estate investment، were impacting the situation.

Foreigners have flocked to Portugal in recent years in search of a warm climate and lower costs of living. According to an April report from the statistics institute، these buyers are willing to pay more than double for a home in Lisbon than their local counterparts.

To try to regulate demand، Portugal’s government in 2021 began restricting its golden visa program to property purchases outside Lisbon and the northern city of Porto. It also plans to increase the share of public housing from 2% to 5% of all housing in coming years.