Lisbon, the capital city of Portugal, is rapidly becoming one of the most expensive cities in southern Europe to buy or rent a home, according to a recent report. Although Paris remains the most expensive city for both buying and renting, Lisbon has experienced the largest increase in property prices for sales, with a rise of 9.8% compared to the first quarter of 2022 and 3.4% compared to the last quarter of 2022.
Reasons for the Increasing Property Prices in Lisbon
Lisbon’s property market has experienced a significant increase in prices, and there are several reasons for this trend. One reason is the increased demand from foreign investors. Portugal’s Golden Visa program, which offers residency to those who invest in real estate, has attracted many foreign buyers to Lisbon. This increased demand has driven up prices.
Another reason for the rising prices is the limited supply of housing. Lisbon is a compact city, and available space for new developments is scarce. Moreover, the city’s strict building regulations make it challenging to construct new buildings, which has contributed to the lack of supply.
Additionally, there has been a growing number of tourists choosing private accommodation, such as Airbnb rentals, instead of staying in hotels. This trend has reduced the number of available homes for long-term rentals, further increasing the prices of rental properties.
Comparison Between Lisbon and another European Cities
The real estate platform CASAFARI compared the market values of five cities during the first three months of 2023, not only to the same period in 2022 but also to the last quarter of 2022. The study revealed that Lisbon’s average price per square meter is currently above €5,000, making it more expensive than Milan, Barcelona, and Madrid.
In terms of sales, Paris still tops the list with an average price of €12,707 per square meter, while Lisbon follows closely behind with €5,149 per square meter. Milan, Barcelona, and Madrid have lower average prices, with Milan being the third most expensive city to buy property.
The increases on renting prices in Lisbon
The rental market has also seen a significant increase in prices across all five cities, but Lisbon once again stands out with the highest increase of 5.4% compared to the last quarter of 2022 and a whopping 40.2% compared to the first three months of 2022. Currently, the average cost per square meter for renting a home in Lisbon is €23, making it the second most expensive city in southern Europe to rent a property.
When comparing the rental prices of the five cities, Paris remains the most expensive with an average cost of €42 per square meter. Lisbon and Milan are tied in second place with an average of €23 per square meter, while Barcelona and Madrid follow with an average of €22 and €17 per square meter, respectively.
The rising prices in Lisbon’s property market can be attributed to several factors, including increased demand from foreign investors, a limited supply of housing, and a growing number of tourists who choose to stay in private accommodation. While these factors have contributed to the city’s thriving real estate market, they have also made it challenging for locals to afford homes, especially in central areas.
Impact of Rising Property Prices on Locals in Lisbon
While the increasing property prices in Lisbon have attracted foreign investment and boosted the city’s economy, they have made it challenging for locals to afford homes, particularly in central areas. The high prices have resulted in a growing divide between the wealthy and the less affluent, with many locals being priced out of the housing market.
The rising prices may also lead to gentrification and displacement of local residents. As wealthier individuals move into the city center, local businesses may be forced to close, and long-term residents may be pushed out of their homes to make way for higher-income residents.
To address these issues, the government may need to implement policies to increase affordable housing options. This could include incentives for developers to build affordable housing, regulations on short-term rentals, and subsidies for low-income households. Such policies could help ensure that locals can continue to live in the city, rather than being priced out of the market.
Protests in Lisbon in favor of housing
In 1st April, a peaceful protest in Lisbon for housing rights turned violent in the evening, with clashes between some protesters and the police. The demonstration began with chants, signs, and drums, but tensions rose near the SuperMarket Oriental when two women were detained for allegedly vandalizing some shop windows.
According to the police, the officers were attacked with physical aggression, stones, and glass bottles, so they sought refuge in the nearby supermarket with the two women. Other protesters tried to force entry into the supermarket, leading to the use of force by the police. The situation escalated when the police attempted to move the crowd away from the supermarket, leading to chaos with batons and glass bottles flying in both directions.
Not only in Lisbon we could see some protests, but in Coimbra, Porto and Braga. Check out some videos from Tsf here.
The protesters demanded the release of the detained women, but the police refused. At least 50 riot police officers were called to the scene, and there were more moments of tension, with shoving and shouting. The protesters accused the police of violence and called them fascists. By the end of the night, everything was calm, and the square was clean, with only two police cars remaining parked. The police reported that one officer was injured, and several police vehicles were damaged.
The protest was about the housing crisis in Lisbon, which has resulted in rising property prices and affordability challenges for locals, particularly in central areas. While the protest started peacefully, the violence that ensued highlights the growing frustration among locals and the need for solutions to address the issue. The government must take action to increase the supply of affordable housing options and prevent the displacement of local residents due to gentrification.
In conclusion, Lisbon’s property market is on the rise, and it is now the second most expensive city in southern Europe to buy or rent a home. The city’s thriving real estate market has attracted foreign investors and tourists, but it has also made it difficult for locals to afford homes.
