Viewing 9 posts categorized under Real Estate

Short-term rentals in Portuguese metropolitan areas and the housing market

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.

Loss given default in residential mortgage loans in Portugal

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.

The short-term rental market and housing affordability

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.

Where are the expensive housing rental rates in Portugal?

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.

Household indebtedness in Portugal from 1961 to 2011

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.

I feel wealthy: house prices and household indebtedness

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.

Discrimination against same-sex couples in the Portuguese rental market

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).

Residential price premiums for energy efficiency

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.

The effects of cultural heritage on residential property values: evidence from Lisbon, Portugal

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.