Housing Package slammed as “attack on private property”

Portugal’s new Housing Package unveiled on Thursday last week was bound not to please anyone.

And thus it has proved to be; labelled as “an attack on private property” which showed Portugal was still haunted by its communist 1970’s past.
The APPII (Portuguese Association of Property Developers and Investors) has dubbed the government’s leasehold proposal “an attack” on private property, claiming it removes confidence from investors without fixing the housing problem.
“Apart from being insufficient, (the measures proposed yesterday) exclude the creation of more new housing, the most important measure” to respond to the crisis, APPII president Hugo Santos Ferreira said in a statement.

The association points to six points in its criticism:

Housing crisis requires a long-term regime pact; 
Lack of measures and incentives for new construction; 
Lack of measures for young people; 
Attack on tourism and foreigners; 
“Assault” on private property; 
End of “Golden Visas”.

The proposal “for compulsory leasing of vacant properties is an attack on private property“, says Santos Ferreira, considering that, in this case, it will contribute “even more to remove investor confidence”.

As for the end of the granting of new ‘Golden Visas’ for habitation purposes, he says there is “no study to support” this decision, which he considers “incomprehensible”.
“This decision is hasty and harms the attraction of foreign investment and consequently the entry of wealth into Portugal,” he warned, stressing that it is incomprehensible how one can end a programme “of such importance” without an impact study, “when the numbers show precisely the opposite” of the measure now announced.
“Has the government created a working group with the ministry of foreign affairs to study the impact of the “Golden Visa” programme in the country? Where is this working group? Where is the study that contradicts the reality of the numbers?” Santos Ferreira asked (admittedly making no reference to the fact that Brussels actually “demanded” the end of golden visas over two years ago)
To solve the housing crisis, the APPII wants a “long-term regime pact”, understanding that “given the current, and consensual, housing crisis”, the first step to take is to create a pact “that would guarantee investors — and future owners and tenants — the continuity of these and other future measures”.
APPII said the lease regime had to be stabilised, to “bring back trust” to the market, and said that the programme presented by the government “does the opposite” with “compulsive measures“, “coercive works“, “mandatory leases”.
The association also cites the “in-existence” of measures and incentives for new construction: “With the exception of changes made to municipal licensing processes, no measures have been announced to encourage more new construction on the market.”
Regarding the lack of measures for young people, the association stresses there are no measures favouring housing acquisition by young people or even measures aimed at promoting green/sustainable housing.
“A wasted opportunity especially for young people, who suffer most from the current situation,” said the statement.
Regarding the “attack on tourism and foreigners”, APPII maintains that a drop in ‘tourism supply’ will result in a drop in foreign demand “with serious impacts for the national economy”. The statement insists the government’s thinking constitutes “an attack on the economy of the cities, commerce and urban rehabilitation”.
APPII is a private association and represents the main national and foreign real estate development and investment companies operating in Portugal. Over the years, it has established itself as an essential link between Portugal and international investors, says Lusa, adding that the government’s package, laid out last night, will now be placed “under public discussion for a period of about a month” so that the measures can be later definitively approved in the Council of Ministers on March 16.
It was a view largely shared by the Portuguese Association of Estate Agencies and Estate Agents (APEMIP).
Its President, Paulo Caiado (pictured) called the measures “frightening” which would have an overall dangerous and negative impact for the Portuguese.
“The aim of some of these measures is to encourage house prices to fall and this was stated by the Prime Minister.
“But in a country in which 73% of families own their own homes (63% don’t have a mortgage), the message that he (António Costa) is sending to people is that their main nest egg in terms of savings, their most valuable property asset, will fall in value”.
Caiado says that that the government isn’t going to fight social inequality by impoverishing the majority in order to help the excluded have access to housing because the lower middle classes don’t buy expensive houses.
The APEMIP president also thinks the government’s arguments against the Golden Visa programme are “absurd”.
“Scrapping the Golden Visa won’t control speculation. The Golden Visa is aimed at High Net Worth Individuals buying houses of €700,000 and over. In 10 years the Golden Visa programme has represented a mere 0.6% of total property transactions in Portugal.”
But either way, the Portuguese Government had already been ruminating on terminating the programme for some time after the European Parliament’s Civil Liberties Committee denounced the schemes as “objectionable from an ethical, legal and economic point of view.”
But is also seen as a populist move that will please the mass of voters at a time when the current PS socialist government is losing popularity as it faces a clutch of corruption and cronyism scandals, even if it irritates Portugal’s powerful property sector which argues that it represents around 15% or more of Portugal’s GDP.
According to Reuters “rents and house prices have skyrocketed in Portugal, which is among the poorest countries in Western Europe. Last year, more than 50% of workers earned less than €1,000 per month while in Lisbon alone, rents jumped 37% in 2022.”