The Portuguese can no longer afford to live in Portugal

Quite honestly, apart from the generally increasing gap between rich and the poor, one big problem in societies nowadays is that you can simply get richer and richer just from owning property. For example, if you own three ordinary apartments in Lisbon, you can live in one of them and easily make a good living by renting out the other two as holiday apartments. Because cleaning services, guys who do repairs, etc., are cheap in Portugal, this involves almost no work. Moreover, the net worth of your property will continually increase while you do (almost) nothing. I'm not saying I blame these people, I would do the same if I had the opportunity, but this is a huge structural problem in my opinion.

I was lucky and making really good money in tech but was devastated by how the area I grew up in had turned into a nightmare and everyone I know (even family) leaving the area. I too ended leaving as the cost vs. quality of life didn't make any sense and I couldn't see my family living in a place I didn't even recognize anymore. Most people don't talk about it but there is a huge diaspora of bay area residents due to the stuff mentioned above and it breaks my heart to think we will most likely never return and familiy/friends I expected to spend the rest of my life with all leaving.

1. Flood the market with affordable state housing, Austria-style - with the bonus of building new, boosting the national economy.

2. Create very progressive (rapidly rising) taxes based on property value - making untenable the current practice of parking money and profit by simply buying & holding empty flats and the like.

3. Raise salaries - currently portuguese salaries, and their weight on GDP, rank the lowest in the EU.

(and no, it won't create an inflation spiral: the current inflation spike is, first and foremost, the result of a supply shock, price-gouging and speculative/cartel practices - corporate profits being at a record high is proof of that)

Unfortunately, incentives are heavily stacked on leaving things as they are, as the ruling class is mostly made up of the landlord class, and, is not sensitive to (sometimes even not aware of) the struggles of assetless commoners that only earn income from their (low) salaried labor. Or, even worse, stands to lose their current large gains on capital/assets if this is fixed - and most portuguese media outlets trumpet their - private - master's voice and interests. Additionally, just leaving things as they are, also scores brownie points with the EU by making the Government (even if "center-left") appear "frugal". And PM Costa has personal ambitions for future EU high office.

(...who will be the next head of the European Commission or the European Council?)

Fun fact: I - as a single - live in a way too big, luxurious and expensive apartment because of this. I rented it, when I was still working for the man and was making a killing. Now I live a much more modest 4-hour-workweek life. It would be better for me to move to an apartment half the size. Then a big family could live here nicely. But no way. No landlord in Germany rents to a freelancer who enjoys a "I'm mainly slacking off for a while" lifestyle.

If you have a city with X housing units, but 5X people from within the city + all over the country/world want to live there, and for whatever reason no one wants to/can build 4X more housing units, how do you fairly determine who gets to live there and who doesn't?

* Is it fair if you were born in Lisbon you get to keep living in Lisbon?

* Is it fair if people early in their career get to live in Lisbon because it will advance their career much more than if they lived in the countryside?

* Is it fair if a rich person gets to live there because they can pay a lot of money to do so?

Whatever policy is in place, it will be deciding the winners and the losers, or the people who get to live in Lisbon and those who don't.

Central city locations in Lisbon and Porto have exploded in price, but this is due to AirBnB rather than rich expats. Portugal's tourism industry has boomed, which has put money in a lot of people's pockets, but has distorted local economies somewhat. Better management is required, for example cracking down on AirBnB and NOT building that new cruise liner terminal.

Unfortunately the upper middle class idyll (alluded to in the article) of living a dilapidated (but in a cool way) apartment ten paces from your favourite coffee shop, while doing a socially respectable play job is now no more viable here than in SF, London or Berlin. Indeed, my own favourite 'coffee shop' got turned into a chain tequila bar.

Outside the hot centres, things aren't as bad. Public transport (at least in the AML - Lisbon Metropolitan Area) is excellent by any standard, and decent apartments are available for sensible prices well within one hour public transport commute of the downtown. Compare with London, where people are fighting over each rental.

> family factor weighs a lot here

Yes, and this is a problem, given that Portugal only became democratic 48 years ago and has a large amount of cultural baggage from quite frankly medieval times. Also, the implication of this statement is that family doesn't count elsewhere - and in case you missed it it was spelled out a few lines later, which should give you an idea of the residual naivety and insularity of (old) Portuguese culture. Agency - the idea that you can do or think something independently, and then take responsibility for it - is somewhat lacking too.

But! There is much that is very good about Portugal and the Portuguese people, I feel that here it is ok to be kind to each other. Furthermore, there are good changes, new opportunities are arising (perhaps in a very small part to some of the more productive visa holders), and I see a great future for Portugal - even if many Portuguese often don't.

However, you can't have it both ways. If

> countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there

then clearly not

> wealthy foreigners from all over the world, to whom we offer a paradise where they enjoy the same services but where they don’t pay or pay less tax than the general population

Either they live there and use services or not.

It doesn't matter if rents are curbed under 1k a month. The median under 25 earns less than 700 euros a month.

I talk to people in Portugal and I hear more or less the same salary discussions and ranges for more than 20 years. It is a stagnant labour market for literally +20 years! When adjusted to inflation it becomes even more ludicrous.

The iron curtain countries in the Baltic as well as Slovenia and Czechia, have all surpassed Portugal in wage growth. That should give anyone reason to pause.

Portugal has a few succesful SMEs, a wine industry, a cork industry, some textiles and not much more to show.

The Portuguese economy is mostly services which are circular not actualy exported and the obvious exported component which is Tourism.

The majority of Portugal's EU Cohesion Funds were sunk on motorways. The country has suffered from lack of strategy in both Government and Industry since the 80's.

There is only so much we can keep blaming on the dictatorship regime of Salazar 50 years ago. At some point politicians and business owners/investors need to take ownership of their fuck ups.

Sometime in the last 100 years, leaders around the western world realized the massive real estate opportunity of strangling natural urban growth and price gouging on the limited supply they artificially created through euclidean zoning and countless layers of regulatory process meant to disincentivize investment in development. Just build more housing, and a lot of the economic ills of the 2020s around the world will evaporate.

I almost think that the US is doing pretty well with this in the sense that you can still move somewhere that's cheap relative to your salary, but that only holds true if you're able to do it with remote work. So, maybe it's not true at all.

How is that different from other places? Houses in the center of big cities are always a lot more expensive than others far away from it. Want a small one in the center of Rome? Here you are: 27mq, 2nd floor and no elevator, no heating, no air conditioning, abysmal energy efficiency, no kitchen, renovation needed, only €600,000. What a bargain!

https://www-tecnocasa-it.translate.goog/vendita/appartamenti...

No thanks, I'll rather spend less than one third for the 7 times bigger house I'll be soon relocating to. I lived most of my life near the center of Rome; if you come as a tourist I concur it can be a wonderful experience, but after decades of traffic, noise and pollution, leaving for a much quieter and cleaner place with plenty of space for my hobbies is the best thing I could do. And it's also much cheaper. YMMV of course.

I’m a globe trotting engineer who understands globalism and what access tech is opening up to it. I don’t mean being a digital nomad. Rather, tech is collapsing or expanding concepts of borders, nationalism and so on in very meaningful ways. That’s a hugely compelling area to work in vs chasing an OKR for Google ads. I don’t think it’s reversible, and I find a lot of value personally and professionally from being in that space because this is the rare moment where the world is changing and I’m in a field directly involved with it.

The other aspect is it’s locals selling to the foreigners, and a personally compelling reason to go there is urban areas of the USA have screwed themselves up with the cost of living. I want to participate in problems, not pay $5k/mo for a 2bdr in NYC or soon Austin or Nashville so I can go to bars with other techies. So if locals weren’t selling at hugely inflated prices, I’d be firmly in favor of that. So, look to the Portuguese neighbors selling apartments first.

But, no excuses - I see $500k 2 bdr in Lisbon and think that’s a chance to live in a world that is way too expensive and commercialized in NYC. A local in Lisbon is getting hosed by that and my mobility, no way around it.

In short - am I part of the problem, what responsibilities do I have vs the locals and govt policies about foreign purchases, do my motivations matter at all vs the outcomes.

I don’t know yet, Hard to say, although it’s good to face hard facts via articles like this. Networked-globalism won’t reverse, and I think it’s more likely the quiet parts of the world (rural America, cheap Europe) are just going to go through some transformations that can’t be stopped and the symptoms look like this article.

We are living more and more in a world where people work but are not able to live with dignity

If you live in any society where land values are private profit, expect nothing less.

We're seeing this in America too, but hopefully with any luck, we still have enough entrepreneurial inertia that salaries (mine especially) remain high enough for a little while longer to make this palatable.

Pandemic came, he stayed in Brazil doing remote work. Found him a few days ago. He told me he gave up going to Portugal and decided to stay in Brazil for now mostly because cost of living there. His initial salary would be 1.6K euros.

> The government has taken desirable measures for foreigners, making it easier for them to get golden visas if someone invests a certain amount of money. My husband, who works in real estate, tells me countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there.

There are a bunch of restrictions on where and what types of properties qualify. You can no longer buy property in large cities and get the 'golden visa'.

I do not think that is the main driver in large cities. IF these price hikes are indeed driven by foreigners, it's probably other European Union residents.

> Nowadays, flats are being rented in Lisbon for four thousand euros

Yeap. Rented. So why did they bring up the visa thing? You can't qualify if you rent.

Also, housing prices have been increasing all around the globe at the same time economies are screwed up and inflation is rampant everywhere. Blaming foreigners seem... xenophobic? I didn't know Portugal was like that.

For starters, is there enough new construction to satisfy demand? If not, there's the answer.

> (...) And if Brazilians, who must be the largest source of Portuguese immigration, move here

Wait. I thought the problem was rich foreigners? There are rich people in Brazil sure, but I seriously doubt their numbers would even move the needle. The overwhelming majority of expats are _not_ millionaires. If you are that rich, you can have a pretty great quality of life and would only look to live in Portugal if you were really into Europe or something like that. Rich brazilians are more likely to want to have property in Miami.

> The Portuguese are becoming, nothing more and nothing less, the servants of big foreign millionaires

Back to the foreign millionaire thing.

Way back in 2012 I had the opportunity to live and work in Europe. I considered Portugal, but while the country is amazing and the food is good, the salaries were utterly terrible compared to the neighboring countries. It seems that things have not changed.

https://www.reddit.com/r/PortugalExpats/comments/vy0i5r/crit...

It's proved... controversial! I'd be interested to get HNs take.

Portugal has an influx of foreign funds through Golden Visa and similar programs. It should take that money and build social housing that is, at least at first, only open to Portuguese citizens. Think Vienna.

In areas where building is a problem, just use funds to buy properties and turn them into social housing.

I don’t know what restrictions there are on foreign real estate purchases. Personally I have no issue with owner occupiers. But any “investors” (including AirBnBs) should be made illegal or simply taxed into oblivion.

Vancouver, Toronto.

Surpluses are being gathered by the global elite and they are coming back to buy property the locals cannot afford and leave the spaces underutilized and empty.

How on god's green earth we allow our 'land' in urban areas - a very valuable resource to be 'exported' while owners pay nary any taxes ... is completely insane.

We should basically ban foreign ownership, or, tax it heavily and especially require domiciles to be either occupied or to have a tax so that it 'gets occupied' at some rate.

High rents mean that a lot of people like a place enough that they'll fight (economically) to live there. The fact that you've lived in a place since before other people might feel like that should entitle you to low rent, but it doesn't, that's not how markets set prices.

High rents are just once aspect of "unpleasantness", and people will move around till the misery is equally distributed. Economies ebb and flow and shift from place to place, so it the process never ends, but don't be fooled, there is nothing broken about systems of market real estate prices, in a sense they're the final leveling of a system, the equalizer of all other desires.

It's like currency exchange rates, whichever way they go, there's good an bad, can afford more foreign goods but nobody wants to buy your goods, or can't afford foreign goods but can sell exports. But there's nothing to "do" about exchange rates, accept them as given and plan accordingly.

Bad transportation problem in your city? Think the new public works project is going to fix it? Think again, better transportation makes for more efficient redistribution of misery.

Now, I don't mean to sound negative: the redistribution of misery is a leveling, like stock prices going up and down with every trade, there is still a buyer who wants in and a seller who wants out. The redistribution of misery always entails some people getting less miserable.

The evolution of new housing construction over the last years https://www.pordata.pt/en/Portugal/Completed+dwellings+in+ne...

The number of conventional family houses in Portugal https://www.pordata.pt/en/Portugal/Conventional+family+housi...

My opinions: The housing market has been stagnant since 2010 while at the same time interest rates have been low. The population might not have risen a lot since 2010 but the usual trends of moving to city centers, people leaving their parents house (which keep the same house), people wanting new/bigger houses than their parents are still pressures present.

This means there's a big pressure in demand for housing which is not being met by supply which increases the prices. My speculation is that foreign investment has a very low impact in the housing prices, but it's just my speculation. Even if it's a considerable impact, the fix is always to increase supply of houses so that prices drop and we also get foreign investment.

I'm sure the author has their reasons or whatever, but when they make statements like this:

> It’s not easy for anyone to emigrate, to have to deal with and to submited themselves to another culturee. It’s all hard, but to live away from those we love the most its the hardest.

It's just incredible to me that someone would act against their own economic interests so blatantly. The greatest innovation of the EU is free movement, and this person is unwilling to take advantage of it to escape economic hardship.

Obviously my mindset and the author's mindset have irreconcilable differences.

I think how the author keeps using "foreign" as an insult reveals something about their thought process:

> policies that benefit foreigners more than their residents.

> the majority are foreigners who are not there for a visit, but who live there.

> large public companies were sold off to Chinese managers who now do whatever they want

> The Portuguese are becoming, nothing more and nothing less, the servants of big foreign millionaires

The investor class inflates the value of the assets, meanwhile the working class are just struggling for a place to live.

- Increasing income inequality short-circuiting the backpressure role of market pricing (and, more specifically, the use of home ownership and immigrant-investor programs as a way to sidestep restrictive immigration systems)

- Countries attempting to replicate the American suburban lifestyle, which is economically unsustainable as voters are incentivized to constrain supply in favor of "line go up"

- The economic gravity of living in a large city.

The econ 101 explanation of markets is that increasing price lowers demand, but this is determined by the "elasticity" of the supply and demand curves. The shapes of the curves determines what the market will do when supply or demand shifts. But if these curves are straight lines, or "inelastic"; then suppliers or buyers do not compromise on quantity and the market gouges people.

Supply is inelastic: most cities are hostile to redevelopment and all the economically-viable land in the city has been used up. No matter how expensive housing gets, people will not be able to build more of it, so price goes up more. In fact, when housing gets more valuable, there is more political resistance to increasing supply, which makes prices go up more.

Demand is inelastic: most housing buyers need to own a house. Homelessness is at best inconvenient and at worst illegal. Moving out of a city is expensive, and will require finding new employment, possibly at a lower hourly rate or salary.

The end result is that the housing market works less like a market and more like NFTs pre-a-few-months-ago. It is politically engineered to ensure quick and profitable exits for the vast majority of homeowners. However, this process cannot go on forever; because eventually home costs will outstrip wages, which puts backpressure on the whole "line go up" thing.

This is where the rich and powerful come in. They do not respond to pricing backpressure the same way you or me do. If a flat in Portugal is a million euros instead of half a million, who the hell cares? They can afford it anyway. They represent "greatest fools" - people who can resolve a speculative bubble by just buying the asset and not caring about it.

It's also kind of a mistake to say that "the Portuguese can no longer afford to live in Portugal". The population is not a monolith; it's more correct to say that today's middle class Portuguese cannot afford to live in their own country, but prior decades' middle classes absolutely could have, and the price inflation in the housing market is specifically to the benefit of those people.

Additionally, Portugal is suffering from high taxes (because everyone tries to avoid paying them, it's a vicious circle), and low productivity (they are working a lot, but ineffectively and in the wrong industries).

Almost 10% of the population have emigrated to the rest of Europe and they have every right to do so, just like all Europeans have the right to live in Lisbon.

And for the Brazilians being picked on in the article - Portugal could never finance its completely unsustainable social security system were it not for the influx of foreigners working there.

What's really needed is to address government corruption, fighting tax avoidance, lowering the taxes and increasing social housing projects. But this is very difficult to do.

Does anyone know other good reads to get a better understanding?

[1] https://www2.deloitte.com/content/dam/Deloitte/at/Documents/...

If your power goes out or there is a water leak in your home, you need an electrician or a plumber. Preferably one who doesn't have to live five hours away. If you need an ambulance and medical attention, you need doctors, nurses, and medical personnel. Hopefully they didn't get priced out of a 50 mile radius of your home.

And if the world consisted of only millionaires and an army of robots, if everyone is a millionaire, no one is. A carton of milk would just cost $700 and a lower end house $30M.

Be a YIMBY. Embrace looser zoning regulations and more and denser housing where you live. And don't jack up the rent to market rates if you're already turning a profit.

You can either have a housing market or you can make sure everybody has affordable housing. But that means making housing a public good rather than leaving it up to investors, but this requires the opposite of the austerity that was imposed on Portugal during its debt crisis.

If you think that's utopian thinking, consider Red Vienna and its housing projects which continue to exist today and still provide affordable decent quality public housing in the city: https://en.wikipedia.org/wiki/Red_Vienna