Developers say ‘More Housing’ package “paralysed the sector”
The Portuguese Government’s ‘More Housing’ package, which seeks to help alleviate the chronic affordable housing shortage suffered in Portugal’s main two cities of Lisbon and Porto, did more harm than good and “paralysed the real estate development and investment sector in Portugal” according to a sector association head.
The President of the Portuguese Association of Real Estate Developers and Investors (APPII), Hugo Santos Ferreira said on Thursday that the policy which included measures such as the forced appropriation of unoccupied properties that show no sign of gas or electricity bills being paid for beyond a certain amount of time, had merely “paralysed the entire sector” since it was announced on February 16.
Hugo Santos Ferreira was speaking at the IV Real Estate Development Conference in Lisbon which brought together all of the main players in the sector.
He outlined that the energy crisis, the increase in the costs of raw materials, labour, and the galloping rises in interest rates have all made 2023 one of the “most challenging years in the last decade for the real estate sector”.
He added that the ‘More Housing’ package had “spooked the sector”, “driven away investors”, “terrified property owners” and “irritated the population”.
The measures announced by the government caused “toxic effects for Portugal’s credibility and undermined the confidence of investors and property owners”, said the APPII president and warned the Government that he wasn’t sure if “we will see it win an absolute majority in the short to medium term.”
Despite recognising the “efforts to converge” on opinions and solutions between the ruling PS and the opposition PSD party, listening to developers it seems the proposals from the political parties are not enough to win back the “absolute loss of confidence”.
In order for this to be recovered “stability and predictability” needed to be given to Portugal’s rental law, taxes needed to be “lowered for new build” or the “VAT rate on buying first houses should be reduced from 50% to 10%, as is the case in Spain”.
The developers also said that costs had to be reduced on construction raw materials, and manpower, “making more land and plots available”, while reforming and streamlining Portugal’s justice system, making it “faster and more effective”.
There also needed to be a rental system that protected tenants, but not at the cost of the landlords.
Finally, it was urgent to “reduce, shorten, and simplify” the licensing process which was “the major asphyxiating factor to providing cheap housing”, said Hugo Santos Ferreira.