Viewing 11 posts categorized under Real Estate
December 14, 2024
What happens when short-term rentals open in your neighbourhood? This question has sparked intense debate across academia and the media. It has also received attention from policymakers, mainly due to some negative implications: reducing housing supply, increasing house prices and displacing residents. However, short-term rentals can also offer more opportunities for local businesses and create new jobs.
Caption: Registry rates in Lisbon. Caption: Registry rates in Porto. Portugal provides the ideal setting to scrutinise the impact of such type of accommodation on its surrounding economic environment as 12% of the housing stock in Porto and 11% in Lisbon was used for short-term rentals between 2015 and 2020.
August 29, 2024
Increased housing affordability problems are well-known in the European Union (EU) and Portugal. According to a study by the International Monetary Fund, Portugal ranks ninth in house price increases in 2020 and third in price-to-income (an indicator of housing unaffordability). Within the EU, Portugal ranks second in house price increases (adjusted for inflation) from 2016 to 2020.
In a sectorial context of price increases and affordability concerns, it is common for governments to resort to taxing excessive profits.
January 16, 2024
In the last decade, Portugal has witnessed a significant surge in tourism. This phenomenon, coupled with the proliferation of temporary accommodation services and short-term rental platforms such as Airbnb, has sparked an intense debate due to their perceived role in driving up house prices and displacing residents, shaping the urban landscape across the country, especially in highly touristic areas. This paper studies the substantial growth of short-term rentals in Portugal (see the figure) driven by a pivotal 2014 policy change that created a streamlined process for hosts to register their short-term accommodation services, commonly known as local lodging establishments, to assess its impact on housing prices.
December 13, 2023
Expected costs of mortgage default depend on the borrower’s probability of default (PD) and the loss in the event of default (LGD). This paper studies the factors that characterize LGD using comprehensive loan-level data obtained from the Portuguese Central Credit Register.
The paper finds that the initial loan-to-value (LTV) ratio is the most important determinant of the LGD of mortgage loans, although the relation between these two variables is not linear.
February 7, 2022
While beneficial for the economic recovery of Portugal, the rising trend as a tourist destination can also generate negative impacts in the population. One important concern is the rising costs of housing, particularly in the city centers. The authors collected data for the period 2011-2014 on Airbnb presence, house prices and rents to quantify the impact of Airbnb’s short-term rentals on housing affordability in Portugal.
Caption: Transaction Prices, in €/m2, in civil parishes within Lisbon and Porto.
March 13, 2021
This paper analyzes housing rental rates at the parish level within municipalities. The analysis explores spatial patterns of housing rents in 4049 Portuguese parishes across 278 municipalities using data from the 2011 Population and Housing Census from the Portuguese National Institute for Statistics.
Housing rental rates tend to be higher in parishes with greater population density (measured by the number of citizens living per square kilometer), a higher number of dwellings, and greater potential sustainability (measured as the ratio of working-age population-between 15 and 64 years-to elderly population-aged 65 and over), better mobility (measured as resident population employed outside the territorial unit plus employed non-resident population in the territorial unit divided by employed resident population), and a higher social-diversity ratio (measured as a weighted average of each socioeconomic group), besides the dwelling’s useful area in square meters.
January 22, 2021
Household indebtedness in Portugal has drastically increased in the last 30 years, with households’ indebtedness at around 20 per cent of disposable income in 1990 increasing to 118 per cent of disposable income in 2004.
Some of this indebtedness is due an increased demand for housing. For a while rental rates were frozen, disincentivizing the rental market, while successive Portuguese governments helped low-income households into housing through the Crédito Bonificado program.
October 11, 2020
Increases in house prices are known to stimulate households’ consumption. Since residential property is an illiquid asset, households may have to increase debt to adjust their current expenditure to their new perceived wealth. This study is particularly relevant given the recent significant rise in property values in Portugal pre COVID-19.
This paper relies on microdata retrieved from the first wave of the Household Finance and Consumption Survey to examine the response of household debt to households’ perception of their residential properties’prices.
September 14, 2020
A correspondence-based field experiment was carried out in the Portuguese housing market to determine whether same-sex couples are treated differently than opposite-sex couples. This is the first study of its type to explore the relation between discrimination and religiosity.
In this experiment, fictitious couples replied to real housing ads in the metropolitan areas of Porto and Lisbon via e-mail. The applicants are portrayed as married, having stable income and professions. Some of them are opposite-sex couples, others same-sex couples (female or male).
February 5, 2020
This paper addresses the question of whether increased energy efficiency, as measured by the Energy Performance Certificate (EPC), has an impact on the transaction price of residential properties in Portugal. The investigation of the relationship between the EPC label and residential property prices is carried out through the econometric estimation of an hedonic price model, which has been used as the workhorse model of house prices.
Using a dataset of 256,000 residential property sales for Portugal, this paper estimates a price premium for energy efficiency.
July 30, 2016
Historic cities are identifiable through their iconic monuments and buildings. Location relative to these structures generate premiums in the housing market. We examine the impact of such historic amenities on housing prices in Lisbon, Portugal. Results reveal heterogeneous impacts from different types of monuments. Churches, palaces and stone architecture have their own unique impact on the market and landmarks generate the highest premiums.
Residents value living in proximity to a non-landmark church (yielding a premium of 4.