Portugal’s rental market too pricey

 In News, Property, Real Estate

Home rents in Portugal are overvalued leading to people preferring to buy their homes according to the National Statistics Institute (INE).

Says ECO online news, when it comes to finding a house to live, the Portuguese prefer to own their own homes rather than rent.
And the numbers speak for themselves: last year, for every 100 homes, 3.5 transactions were made and only 1.2 new rental contracts.
This is because buying a house is cheaper than renting. In Portugal there are more people buying than renting. Data from the last census quoted by INE actually show this: in 2011, 72% of classic family homes were mortgaged properties. The trend continues to the present day.
In the last 12 months ending in June, 3.5 transactions per 100 classic homes were mortgage contracts and only 1.2 new contracts were rental states the INE.
This situation is particularly relevant in specific regions, mainly in the Metropolitan Area of Greater Lisbon. Here, for every 100 properties transacted, four were mortgage contracts and 1.6 were new rental contracts.
However, the Autonomous Region of Madeira saw less movement in both the buying and selling and rental markets: out of every 100 properties, 2.3 were sales and 0.9% were rental contracts.
Nevertheless, the data reveals the same: the Portuguese behave more like the English in preferring to be ‘king of their castle’ rather than tenant.
And being a tenant brings higher costs. The INE studied the price of housing for purchase and rent and concluded that the rental market was overpriced.
This phenomenon was particularly true in municipal council areas with more than 100,000 inhabitants. In Greater Lisbon, with the exception of Lisbon proper, and other major municipalities, “The cost of renting was overpriced”, including the Metropolitan Area of Porto.
One region of Portugal bucked this trend, however, and that was the Algarve where overall, for most municipalities the opposite was true where the cost of renting was cheaper than buying.
Last year the estate agents Century 21 published a study which bore out the findings from Portugal’s National Statistics Institute (INE).