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Lisbon City Council Admits the Possibility of a Real Estate “Bubble” – But Has a Solution

1 September 2018

Fernando Medina acknowledged that the situation is complicated for locals who want to stay in Lisbon but added that several options are under study.

Industry studies have already proven it, real estate brokers have already admitted it, and thousands of families have already felt the impact of it on their lives. Lisbon is in the midst of a real estate boom, as rental and sales prices have been going up for months to ever new highs, making it increasingly difficult – if not impossible – for most residents (and businesses) to stay in the capital city.

In an interview with the newspaper “Expresso” this week, the mayor acknowledged that a housing “bubble” is forming in the capital, which hinders access to housing by middle-class families. However, the mayor added that the local government is studying ways to mitigate the problem.

Mayor Medina explained that one of the solutions would include the new tax rules that are being considered by the government and that would incentivise long-term rental contracts.

The municipality is also preparing a program whereby properties would be rented to the municipality, which would then sublet to residents, guaranteeing that the owners will always receive their rents.

Explaining that the initiative does not involve any costs to the municipality, since the city council would be required to sublet “for the same price or even a slightly higher price,” the city council president stated that: “We know from experience that there is an aversion to placing homes on the long-term rental market. However, I also know that there also owner/investors who don’t want to sell and would prefer a regular income. In partnership with the Lisbon city council, that income would be risk-free.”

The program should be ready by the end of this year.

Original Story: NiT – Patrícia Naves

Translation: Richard Turner