Lisbon property rental higher than some large European cities
Portugal’s rental market in Lisbon is more expensive than in two large European cities according to newspaper Público, eating up around 58% of available family income.
And those renting houses or apartments in the Portuguese capital are facing rents that exceed their 30% debt-to-income ratio.
In fact, as also reported in Time Out magazine, renting a house or apartment costs more than in Berlin or Barcelona.
A study showed that families in Lisbon are channelling more of their income for house rentals than families in Berlin and Barcelona. The accepted debt-to-income ratio in Berlin and Barcelona was above 30%, but in Lisbon that figure rises to 58%.
While some countries’ governments have begun to take measures to put the brakes on uncontrolled rent prices in order to make property more accessible to the middle classes, the situation in Lisbon and Porto has got worse, with no such effective measures excluding ending the granting of Golden Visas in Lisbon and Porto.
The study, ‘Territorial Dynamics and Morphology’ whose results were published in the newspaper Público on Monday, was carried out by a research group at the University of Porto’s Faculty of Architecture and its Centre for the Studies of Architecture and Urbanism.
The study revealed that the situation in Lisbon was more complex than in either Berlin or Barcelona which have also suffered from house rent and mortgage price increases, but have both become case studies in how their respective Governments/Municipal Councils met the challenge of rent controlling through public housing policies.
The study cross-referenced the price of rents and the incomes of an average family unit with one child in a two-bedroom property in each of the three cities and simulated the value that this type of apartment would have in each of three cites covering the greatest possible price range.
This resulted in a map of each one of the three cities with different colours whereby the warmer redder tones showed where the aggregate family used up more than 30% of its income to pay rent while the bluer tones showed where these payments did not exceed the 30% value limit.
Both Berlin and Barcelona had bluer tones in some zones, but in Lisbon it was impossible to find areas whose maximum permitted debt-to-income ratio required that the aggregated family should channel the same or less than 34% of its income to pay the apartment rental.
The average monthly income of a Portuguese family (€1,563) is much lower than that of the aggregate Catalan family (€2,614) or Berlin family (€3,727). Adding the average rental cost to this equation of a two-bedroom apartment (95 m2), which in Lisbon costs €916 per month to rent, in Barcelona costs €1,170 and in Berlin costa €1,491, the study shows that in the three cities the monthly available income spend exceeds 30%. In Berlin it is 40%, in Barcelona 45% but in Lisbon rental eats up a massive 58% of family available income.