HOUSEnomics
External demands in the Portuguese housing market: multidimensional impacts and the role of public policies
HOUSEnomics aims to study the impact of external demands on Portuguese housing market in the aftermath of the socio-economic crisis of 2011 - 2013 and to provide a comparative survey on policies enacted in other countries to tackle its disruptive effects, to offer guidance for future policy action.
In recent years, the rise of housing prices in multiple countries hampered affordability for multiple social segments. Accounting for this new housing crisis, a burgeoning scientific literature signaled the disruptive impacts of external demands driven by foreign investment flows, non-resident purchases and the rise of tourism short-term rentals (STR) in central urban areas and tourism regions. These effects of external demands in local housing markets create new challenges for urban and housing policies, used to plan and respond to a stable national/local context that is disrupted by demands that are hard to estimate and require a new generation of market regulation, sustained on a robust empirical-based assessment on its effectiveness.
In the last decade, Portugal exhibits several indicators that seem to point to a significant impact of these external demands on the housing affordability. Flows of FDI have risen towards real estate; the volume and capital of non-resident and foreigner purchases has risen; and STR in city centers and tourism regions also rose considerably. As such, since 2018 Portugal ranked in the first positions of rising prices in the Eurozone (Eurostat, 2023); and, in that period Portugal also took first positions in OECD’s price-to income ratio among more than 30 countries, signaling a significant discrepancy between housing prices and national household income (OECD, 2023).
Despite these indicators, we still lack an encompassing perspective on the disruptive effects of external demands in Portuguese housing market and a clear evaluation on public policies that can guide future policy action and tackle what local demand experience today as a new housing crisis.
HOUSENOMICS is designed to offer relevant contributions to the scientific community, civil society, and decision-makers.
First, it aims to offer an encompassing and territorialized perspective on the asymmetrical and uneven impacts of foreign demands on Portuguese local housing markets.
Secondly, it intends to offer a recommendation on effective policies to tackle housing crisis and current processes of residential segregation driven by impacts of foreign demand. These recommendations are designed to be disseminated to decisions-makers and civil society organizations, allowing accessible knowledge to foster a broad participation on debates on housing policies.
Thirdly, it aims to provide a novel contribution to housing studies literature by exploring the role of external demands in housing supply chain that, so far, has not been explored. If such hypothesis proves correct, a set of deliverables in scientific journals will aim at expanding the conceptual debates on the impacts of external demand.
And fourthly, it fosters the development of an institutional network of research, by building up on existing work on political economy, geography, and urban studies at CES, contributing to establish the team within national/international leading groups in political economy, housing theory and geographical studies.
Portuguese Foundation for Science and Technology