The latest ICS/ISCTE survey reveals a consensus in the country: we are facing a housing crisis. The youngest not only agree but also suffer the consequences on their skin. High house prices and a lack of adequate support contribute to precarious housing situations and the growth of “financial anxiety”. The Expresso went to listen to them, from those looking for a house to those who received support from the State (and even then they cannot guarantee stability)
House prices in Portugal reached a new “historical high” in 2022: a growth of 13.2% between the first quarter of 2022 and the same period of the previous year, according to INE data. Added to these values are the almost stagnant average incomes, rising inflation and the general increase in basic necessities. All this helps to solidify an idea: we are facing a real estate crisis. Young people are one of the age groups that suffer the most from the current situation. Most are unable to find their own housing and the few that do risk being plunged into an untenable financial situation. From the north to the south of the country, young people are calling for immediate government action, ranging from investing in public housing to setting maximum rental ceilings. Among the various voices, there are feelings common to all: anxiety and fear of the future.
In the survey carried out by ICS/ISCTE for Expresso and SIC, 91.7% of young people between the ages of 18 and 35 are “totally agree” or “agree” that there is a housing crisis in Portugal. In the rest of the population, the percentage decreased only slightly, standing at 89.8%. “[In the results of the study] what is most surprising is that the opinions of young people do not differ from those of the general population. There are very high standards of agreement”, says Alice Ramos, one of the researchers responsible for the survey. The voices of the youngest are added to those of the elderly also in the measures that are advocated to deal with the housing situation. Solutions that include public investment (90.1% of young people “totally agree” or “agree”, compared to 88.5% of the rest of the population) or a reduction in rental taxes (88, 4% of young people “totally agree” or “agree”, compared to 86.3% of the rest of the population).
The housing crisis is visible in Lisbon, but it does not stop here. From Porto to the Algarve there are fewer and fewer houses at prices compatible with income and more and more young people are anxious, frustrated and with emigration as the only solution in sight. We went to know their arguments.
Studies, Employment and Savings. Nothing Seems “Enough”
Unlike a few decades ago, success in education and employment is not enough to guarantee a prosperous future. The “Highest-Skilled Generation in History” continues to earn precarious wages, especially when compared to the rates practiced in the real estate market. “I have a salary probably higher than that of most young people, and it is assumed that I have all the conditions to request a mortgage and the best they can offer me are installments of 800 or 900 euros. Absolutely unbearable, shares Gonzalo Gómez, 29. The young man, originally from the Algarve and living in Lisbon since he was 18 years old, has been looking for a house to buy for five years, but gives up when he is “faced with prices”. “We are not talking about T1 in Chiado, I am looking in the Almada area and this is not even possible. I studied, I got a stable job, what else do I have to do to get a house?”
Maria do Do and Enrique Martinez, aged 27 and 25, are also in the same situation. The Lisbon couple, whose wedding is scheduled for this year, still cannot find a suitable home for their income. “We have stable jobs with reasonable salaries and even then that is not possible,” Maria do Ó tells Expresso. One of the biggest difficulties pointed out is obtaining capital for the “10% down payment” which, currently, can represent values above 20 or 30 thousand euros. “We both want to start a family, but the fact that we can’t afford to buy a house can delay this desire,” reveals Enrique.
More than 300 kilometers away, the scenario repeats itself. “I’ve been looking for a house since September and it’s impossible. The prices are for foreigners,” explains Rita Ferreira, 35. According to the nutritionist from Penafiel, the housing situation in Porto is very similar to that of Lisbon. In addition to unreasonable home values, high demand makes life more difficult for those who want to buy or rent a home. “I already lined up to go see a house. Just slide hope.”
In the few cases where you do find affordable housing, the person who ends up signing the lease is the one who offers the “higher rent.” “I cannot pay four or five rents at the same time, they are more than four or five thousand euros.” Despite being torn between working “in the public and private sectors”, Rita Ferreira does not have the financial capacity to buy a house or even maintain “her independence” from it. The lease of the T1 aircraft where it is located will be increased, but so far no alternative solutions have emerged. “It’s the feeling that you work and work and work and it never seems to be enough. It’s maddening.”
Support “Out of Market Adjustment”
One way to survive in large urban centers, without sharing housing, is to opt for one of the government support programs. Joao Matos, 28, who lives in Lisbon through Arrendamento Acessível, comments: “[If they don’t get the support] we definitely can’t be in T2 as we are today.” A 24-year-old girl, who preferred to remain anonymous, is one of the few cases that guarantees not only the support of the Arrendamento Acessível, but also the support of the Porta 65 program. Capable of building a future, ”she began. counting Expresso With the two programs, which have undergone recent changes to broaden the range of beneficiaries, it is finally possible for this young woman to live in Lisbon without jeopardizing her financial sustainability. We pay a fair rent, an amount that allows us to save and think about the family.”
Despite the benefits that these programs provide, both young people identify “problems” in their design. In the case of affordable rent, the program assumes that the rent amount is decreasing, and the consideration is relief from the IRS or IRC for the landlord. However, young people say that most owners prefer to choose tenants who do not need this “red tape.” “We made proposals for houses and we already said that we would only be interested in cheap rent. When the moment of truth arrived, nobody wanted it. They replied that there were already many people interested in the current price and that there was a lot of paperwork,” recalls the young man from 24 years.
According to the program’s standards, “almost all youth are eligible, and the biggest problem is with the owner.” Joao Matos agrees that, in this case, most of the bureaucracy “ends up with the landowners.” “There are owners who do not want to enter the program due to lack of confidence in the state or because they prefer to be charged more, because the program has a ceiling [on income].” This ultimately leads to fewer interested homeowners and therefore fewer young people included in the grant. “[This program] is not the most effective response to this brutal housing market in Lisbon,” concludes the 28-year-old tenant. The young woman agrees: “The support is there, but it is very difficult to put it into practice.”
This housing subsidy does not seem to be enough to ensure the survival of young people in large cities. Respondents don’t want to “think too much” about when the subsidies will end. “After these five years, we don’t see a future in Lisbon. The city is not designed for young Portuguese,” says the 24-year-old. “Now is the time to take advantage of the luck we’ve had and it’s time to think about leaving,” he concludes.
Lack of “Financial Knowledge”
The vast majority of young Portuguese do not have the financial capacity to buy a home in the current scenario, or if they do, it is thanks to the help of relatives. The few who manage to buy do so by putting their financial stability at risk. “When I bought a house, I completely lost my mind. I had to go back to my parents’ house for a few weeks and I didn’t ask for money, but I asked for food,” reveals Bruna Bruno, 28. . After three years of searching, the young woman, who works in the field of technology, was able to buy a house in November 2021, in the Karnaxed area, with her own income.
“I managed to save money for the very high down payment and taxes. But with inflation, the house payments increased by about 400 euros.” Like the “vast majority of loans in Portugal”, according to the Banco de Portugal website, Bruna Bruno also opted for the variable interest rate. Accelerating inflation, the young woman went from “an effort rate of 15% to 26%”. Part of this decision derives from a general lack of knowledge among young people about issues such as interest rates or taxes. There is a lack of financial education in Portugal. The banks assure you that you can pay today, but they don’t tell you if you can pay tomorrow and nobody teaches you the best way to do it.” If inflation continues with this upward trend, Bruna Bruno will have to think of ways not to hand over the house to the bank. “I have already considered renting a room in my house, finding an additional source of income, or in extreme cases moving back into my parents’ house and renting out the house. This situation contributes to constant “financial anxiety” even for those who manage to acquire the assets.
When asked what advice she would give to those who are currently looking for a home, Bruna Bruno recalls the importance of “informing yourself well about what you want”, making the best “budget management possible” and trying to “earn money through maximum income”. “I’ve been able to pay my home taxes because I have investments like savings certificates.”
Housing Situation Increases ‘Financial Anxiety’
The precarious housing situation of young people not only limits their future – delaying the decision to have children, for example – but also has consequences for their mental health. “At the end of this year we had an eviction situation about to be evicted, which led to an increase in rent. At that moment I had an anxiety attack, something I had never had before,” admits Gonzalo Gómez. For the Algarve, an unaffordable income in the current price scenario could precipitate a complete life change. “If you were homeless, I would say goodbye and go back to my parents’ house in the Algarve. Then you lose your studies, the fight for a stable job, the whole path of your life. It all comes down to my head.”
Susanna Franco, 30, shares this condition of “mental stress.” The young shopkeeper is sent to the Algarve, where she finds her housing situation precarious. “I stayed in a hotel for a month because I couldn’t find a place to stay. The landlords only accept rents until April or May, and then they increase the rents in the summer,” she explains to Expresso. After living in a “heated garage”, the young woman from Bombarral managed to find a room for annual rent for 400 euros a month, “and it is not even in the center of Portimao, it is more than a kilometer away”. Until she found the room that she considered a “discovery”, Susana Franco found rooms “without a contract”, “ridiculous” prices and “scams” in her Facebook groups.
“There are ads of people asking for a €100 deposit just to go see the room and then not returning that deposit.” These difficulties are not limited only to young people, as there are also entire families living in poor housing conditions. [near her house] there is supposed to be a shop that is rented out to eight people who have divided the house with curtains and put mattresses on the floor. They’ve been living like this for months.” And she left a message: “There is a lot of despair here.” Susana Franco, like Gonzalo Gómez, agrees that persistently high rents and insecurity about the future of housing leave young people with psychological stress.”
These two young people are joined by Rita Ferreira, who sees “immigrant friends” with fewer financial restrictions and access to assets. I have friends who emigrated and bought a house, but I didn’t want to emigrate. If so, it’s sad,” shares the man from Penafidelan. However, staying in Portugal is also synonymous with continuing to postpone your goals for the future. “Everything is on hold, and it makes me anxious and disturbs my mental health.”
Solutions? We Need Government Answers ‘Now’
Faced with this dark scenario, young people demand solutions from the government. In addition to asking for more “adjustable” support to the current situation, a large part of the younger generation believes that the solution involves greater investment in public housing. But not only. One solution could be to invest more in affordable public housing. However, this does not immediately solve the problem. A solution is needed now and not five years from now”, argues Gonçalo Gómez. Another solution, which Gonzalo and Rita Ferreira point out, is to “increase wages”. For Susana Franco, there are two other issues that must be regulated by the State: the value of the rentals and the number of deposits required at the closing of the leases.” There should be a limit to the value of each type of house and they should not be allowed to ask for three or four leases at a time. One month’s rent [a deposit] really gives a guarantee to the owner”. Tourism is also one of the sectors that receives the most criticism and requires more regulation. “If we have foreigners and digital nomads capable of paying these rents, then, naturally, landlords will continue to practice it. Gonçalo Gómez argues that there must be state intervention. For this young man, this is one of the most urgent “anti-speculation” measures. It remains to be seen if the newly created Ministry of Housing, which Marina Gonsalves oversees, will be able to respond to these requests from young people and respect the three months that Costa demanded.
