'In Lisbon, house prices are rising sharply and rental auctions are springing up.'

With a shortage of supply and high demand for rental properties, many European cities are facing a sharp rise in rental prices. In this already-inflationary scenario, the return of housing costs in Lisbon is attracting attention. Portugal's capital city tops many international rankings assessing housing costs and growth trajectories, clearly demonstrating the housing crisis the country is facing.

A comparison published the other day by the Financial Times newspaper from advisory firm Savills shows that over the past few months Lisbon has had one of the fastest increases in rental prices in Europe.The current values represent a 43% increase compared to December 2021. At the beginning''August research by another company Housing Anywhere has identified Lisbon as the most expensive European city to rent a studio or one-bedroom apartment among the 23 cities surveyed. Data from Idealista, one of the country's leading real estate services, shows that in July a square meter of rent in Lisbon was advertised at 18.7 euros (R$98.42). Other Portuguese cities such as Porto and the capital's metropolitan municipalities have also seen prices rise.

'\''Perfect Storm'\'' affected prices.

According to economist Pedro Brink, a lecturer at Nova Business School, Portugal's extreme price situation is due to a combination of factors that created a perfect storm after the last great recession the country'''has survived and, has sought financial assistance from the so-called Troika (the International Monetary Fund, the European Central Bank and the European Commission). "The rise in house prices has been felt particularly strongly in Portugal since the end of the last global recession. First, because it started from relatively low values. Secondly, because the financial crisis led to a significant reduction in construction capacity and a decline in public and cooperative construction," he listed. "A long period of very low or even negative interest rates against the backdrop of the economic recovery after 2014 and the subsequent surge in credit led to demand having a strong impact on prices. At the same time, the bureaucratic''The 'complexity and slowness associated with the instability of legislation, which do not inspire investor confidence, have prevented prices from also provoking a significant increase in supply,' he continued.

The current rise in interest rates and the rising cost of mortgage lending is making things more difficult for families, making mortgage lending unaffordable for many Portuguese. Property consultant and partner of a specialized relocation and property management company in Portugal, Flavia Motta, highlights the distortions taking place in recent years. "These days, those who put 'cheap' housing - that is, with a reasonable price - on the market in Lisbon can't even cope with the number of viewing requests," she says. She''cites a recent ad for a one-bedroom apartment in Almada, a municipality just outside Lisbon on the other side of the Tagus River, for 800 euros (about R$4209). "There were more than 100 contacts and requests for information in three days. In less than four hours, the apartment has been visited 15 times and the owner has already received three offers," she lists. Flavia notes that the situation in the Lisbon region is already leading to many interested parties offering higher prices than the owners initially ask. "For about a year now, we have seen that Lisbon has become a kind of auction for real estate, with interested parties making offers much higher than what was advertised. This is now relatively normal.

Although,'''that Portuguese law states that owners cannot require an advance deposit exceeding two months' rent, due to the market swing this practice has become common. However, sometimes rental applicants themselves offer upfront deposits of several months' rent in order to 'get ahead' in the battle for the property. This practice is especially common among those who do not have a guarantor or cannot verify their tax and financial history in the country. As this often happens to many foreigners moving to Portugal, including Brazilians, the cost of housing is now a major obstacle for immigrants, especially recent arrivals. Due to this situation, it is common for immigrants to live in overcrowded''hostels in poor safety and hygiene conditions. Recently, a series of fires in the center of Lisbon have highlighted the unhealthy conditions in which many foreigners live. In the most serious case, in February, a fire in an unrepaired commercial space converted into housing killed two Indians, including a 14-year-old boy. Another 14 immigrants were injured, including people from Nepal, Pakistan, Bangladesh and Argentina.

The Portuguese housing crisis has been particularly difficult for young people. As well as being among those who leave their parents' home late compared to European Union member states, rising room rents have become a barrier to accessing higher education. Last year, the price of student rooms rose''by more than 10%, according to the latest report from the Student Housing Observatory, published in August. The average price of this type of housing in the country was 349 euros per month. In Lisbon, that figure reached €450 (R$2,364).

The compulsory rent for unused dwellings

In February, Portugal's government announced an ambitious package of measures - many of which were later softened by Parliament - to try to curb real estate prices and help control families' housing costs. The law that dried up the package, called Mais Habitação, was approved by MPs in July. But last week, Portuguese President Marcelo Rebelo de Sousa decided to scrap the text and return it to the Assembly of the Republic. В'In a statement released during the rejection, the head of state acknowledged that the country is experiencing a housing crisis and sharply criticized the government and the proposed measures. One of the main targets of the president was precisely the most controversial measure of the package: the envisioned forced rent for unused residential properties. In the deputies' final version, the initiative was created in a rather limited way and represents a kind of last administrative measure. Only properties in urban centers that have been empty for at least two years will fall into it. According to Rebelo de Souza, "forced renting is so limited and protracted that it looks like a mere symbolic emblematic" and "has a political cost that exceeds the tangible social one'favor'.