Housing rental offer «needs to grow» to meet demand

The purchasing power of the Portuguese still does not follow the rise in the purchase prices of housing, which makes renting the only way of access to housing for many families. Only 26% of the Portuguese live in rented housing, but this percentage is expected to grow due to the consequences of the pandemic crisis.

This is the conclusion of the study “Built-to-Rent: More than a trend”, by Savills, which highlights that the offer in the rental market does not respond to the strong and growing demand, with prices that are too high for the quality of the product presented.

Alexandra Gomes Portugal, Head of Research at Savills Portugal, states that «more than a trend, investing in the development of a quality rental offer, accessible at various salary ranges, becomes essential in the context of growing demand and as part of essential part of solving a social problem'.

At a European level, Portuguese families are the ones that go into debt to buy a house, allocating around 40% of their income every month to the payment of loan instalments.

On the other hand, the figures in this study show an imbalance between the evolution of Portuguese income and the prices of home purchases, a market that is below the financial capacity of many families, particularly single parents, who have difficulties in accessing housing credits. . Between 2015 and 2020, prices will have risen 31% more than the income of the Portuguese.

Savills believes that a solution to fill this lack of supply can be the “Built to Rent” model, which develops multifamily projects (several residential units located in a single building or divided into a complex of buildings in the same contiguousness), a segment that has been developing grow in Europe in recent years.

It is a sector that is resilient to economic cycles, stable and with long-term returns, which makes it possible to diversify investment portfolios.

According to the consultant, there is a pipeline of 10,000 dwellings included in this type of project in Portugal, developed by public or private initiative (accessible housing). But construction costs, tax burden or delays in licensing processes are some of the obstacles to creating this offer.

Source: Vida Imobiliária