Using credit to buy a home is not an easy task for young people. Figures from the Bank of Portugal show that only 10% of existing home loan contracts are for young people up to the age of 35. Economists interviewed by DN/Dinheiro Vivo explain that this low share of young people in total mortgage lending can be explained by low wages and “stratospheric” house prices in Portugal. And they warn that if nothing is done, the situation will worsen.
For Abel Mateus, the greatest difficulty for young people in getting decent housing is related to the low income relative to house prices. And he illustrates: “A loan of 120 to 200 thousand euros for a T2 on the outskirts of Lisbon costs between 550 and 900 euros per month in monthly installments. Only a couple earning at least 1700 and 2700 euros per month can get this loan. corresponds to an effort rate of 30%,” emphasizes the economist.
A situation that is not new and that has led some to emigrate, as Paulo Soares de Pinho recalled. According to the Nova SBE professor, Portugal is “a country where there is a very small difference between the minimum wage and the average wage” and “through policies that have been followed for decades, it happens that people with qualifications, to earn a decent income they must emigrate”. That is why there is a part of the young people who “solve the problem by emigrating or with the help of their parents and the others have to accept the hard reality of not being able to pay a loan”, especially with the current “stratospheric” prices , the economist complains.
The difficulties young people face when buying a home had already been explored by the Calouste Gulbenkian Foundation, as Susana Peralta points out. While access to home ownership has increased in Portugal, reaching as much as 73% of home-owning families in 2011, according to the document published two years ago, young people faced greater challenges when buying a home. A situation that does not seem to have changed. But, as the professor of economics at Nova SBE points out, “We don’t know if this drop is due to price [das casas] exclusively. It could be a change in preferences: people study longer, there are more opportunities to travel, experiences abroad, etc.” Still, Susana Peralta adds that “it seems safe to assume that the rapid rise in prices in city centers is a part of the situation”.
According to the Bank of Portugal, there are 1.4 million home loan contracts. “Half of these contracts have debtors between 41 and 54 years old, only 10% of the contracts have debtors younger than or equal to 35 years,” the regulator states in its latest Financial Stability Report.
tendency to get worse
Looking at the current situation, Paulo Soares de Pinho has no doubt that the challenges of access to housing credit for young people “will only get worse”. Because? “We’ve had rental market catastrophes for decades and the last few have been terrible,” he points out, citing measures such as freezing rents or the difficulty landlords have in evicting them in the event of non-compliance. . , whose rates are quite high, according to The Economist. He argues that this has contributed to the decline in the number of rental properties, which has caused real estate prices to skyrocket.
Based on this scenario, Paulo Soares de Pinho believes that the only solution to solve this problem will be to grow the economy and increase per capita income, which he believes has been stagnant in Portugal for decades. “How can people live in a European economy that competes with Germans or French who come to live here if they have an income compatible with that of the Portuguese economy?” he wonders.
Susana Peralta emphasizes that “there is no magic solution to the high price of houses in city centres, but what is certain is that housing policies have been neglected and others have been promoted that have an effect on real estate prices, without that impact being properly mitigated. taken into account in the implementation or enforcement of public policies”. He argues that several housing policies are needed to promote access, including “increasing public housing and/or controlled costs, facilitating licensing to increase supply, and rethinking recent policies that may have inflated property values, such as benefits for non-ordinary tax residents and golden visas,” he illustrates. “Local housing also has an influence” on this issue, adds the Professor of Economics. A point also emphasized by Paulo Soares de Pinho, namely in relation to cases of real estate that goes from rental to AL and “does not issue receipts, increasing tax evasion”.
Among the measures that can be taken, Abel Mateus points out that “there are some countries that have assistance for a young person to buy his first home”, which includes “the reduction of taxes to acquire the property, as an exemption from stamp duties” .
DN/Dinheiro Vivo questioned the Ministry of Infrastructure and Housing about the measures it has taken or could take to solve this problem, but did not receive an answer until the end of the edition.
Source: DN
