More and more hours worked to pay rent in main Portuguese cities

in News · 20-03-2020 01:00:00 · 5 Comments
More and more hours worked to pay rent in main Portuguese cities

According to a recent analysis by Nestpick.com, the largest aggregator of furnished apartments for medium and long term rentals, in Portugal you have to work more and more hours to pay the rent, taking into account that the increase in wages did not accompany the increase in the cost of rentals.

According to the home search platform, which aggregates the offer of houses advertised on the main rental web pages, and has more than one million properties listed worldwide, the average price of housing in Portugal has risen noticeably in the last year, increasing the share of wages needed to pay rent in the main Portuguese cities.
Taking as a reference the average monthly cost of renting a furnished 1 bedroom apartment, the cities that recorded the greatest increases in the period between January 2019 and January 2020 were Coimbra, with an increase of 83 percent and where the value went from an average from 410 Euros to 750 Euros, and Porto, with an increase of 82.5 percent, where the average cost reached 1,440 Euros in January this year. Lisbon was the only city that did not register an increase, with an average rent costing around 1,300 Euros.
According to the figures from Nestpick, the increase in rents in Coimbra and Porto are well above that registered in large European cities, such as Paris (40 percent), Madrid (38.5 percent), London (16 percent) and 3,8 percent in Berlin, a city with one of the lowest rates of self-housing in Europe and where authorities have recently taken steps to freeze rising rent prices and stem the growing shortage of affordable housing.

Based on the average value of rents for furnished apartments with 1 bedroom, of the cities analyzed the most expensive is London with 2,625 Euros per month, followed by Paris, 2,345 Euros, Madrid with rents of around 1,700 and finally Berlin whose value of 1,470 Euros is very close to the 1,300 Euros in Lisbon.
The reality of disposable incomes and the cost of living are creating an obstacle for businesses and cities struggling to attract highly qualified labour. According to the National Statistics Institute, in 2019 the average gross salary in Portugal reached 1,276 Euros, growing 2.7 percent, but still almost 64 percent below the European average of 2,091 gross Euros per month, according to the VII Monitor Adecco’s Annual Salary Report. The difference between Portugal and Germany, for example, is 1,518 Euros per month, that is, a worker in Portugal has to work, on average, more than 26 months to have similar income to that of a German worker, in just one year.
The small difference between the average cost of rent in Lisbon and Berlin (13 percent), means that a worker in Lisbon has to work many more hours per month to be able to pay a rental compared to a worker in Berlin.
“The rental price in Portugal has been rising year after year and the analysis of the data we have from 2019 highlights that this trend shows no signs of slowing down, at least in the short term”, said Ömer Kucukdere, founder and CEO of Nestpick. “While this may be good news for homeowners, it is also an indication of how difficult it is today and in the near future for students and young workers to find a place to live in the city at a reasonable cost. Our commitment is to offer a simple and free platform that allows them to search, compare and choose a house to rent that best fits their resources.”



Comments:

Hi everyone,
Don't worry about this article. It's outdated. The Portuguese economy is like an express train about to derail according to ratings agencies and economist around the world.
The Portuguese property bubble is about to burst. To put it simply, by next month, properties will be worth a third what they are now. No jobs. No buyers. No tenants...will drive the prices down along with the countries economy.

by Cedric Jones from UK on 21-03-2020 11:08:00

Artur is partly correct. Indeed foreign buyers, including of late the French in particular, have inflated prices, but this is to expected to some degree given the cheap level of inventory (relative to its overall location and lifestyle quality). It was primarily Portuguese who profited from initial sales. There is no doubt that developers should be targeting middle class residential housing but with land prices at exorbitant levels almost everywhere, they need to increase prices and products become "prime". There is a reason why foreign investors are mostly targeting premium product. It is difficult because the one thing that might rebalance the market, a crash which sees a sharp downward correction, is also the thing that most hurts workers.

by Luis da Silva from UK on 21-03-2020 08:53:00

Greediness equals capitalism and will ruin life for the majority of people. Also the climate and basic human rights and needs like food and shelter will be ruined! Just look at our world today. Its not getting better. The Industrial revolution has ruined the planet and humanity.

by Monique Jade Bushell from Other on 21-03-2020 06:09:00

The rents have to be controlled, as it's the entities from abroad, having much more buying power than the locals are buying out properties and this way exploit the local population, still forced to earn way less than elsewhere in Europe. The increase in rents is one way by which the rich Western companies and individuals are trying to force the Portuguese into paying more for just everything. This is simply disgusting and needs to stop!

by Artur from Other on 20-03-2020 04:22:00

The property industry in Portugal has performed very well the last few years so there is no surprise that rent is going up. Though Portugal's economy is improving it remains at the very bottom of the western world. Thus it is natural that property prices and rent will go up more in Portugal than in more affluent western countries. Attempting to control rent so that people can have a shorter commute in expensive cities is irresponsible and will only slow and potentially stop growth. Most of the world solves this issue by incentivising developers to build less expensive communities outside city centers. For example, lower cost housing is being built in Lisbon on the south side of the Tejo River. Controlled rent will lower the country's wealth and impact the tremendous gains made in this decade.

by Will Thompson from Lisbon on 20-03-2020 10:26:00
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