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Written by Sarah Garnett
On the 27th of April, GRI Club Portugal hosted a club meeting in partnership with Round Hill Capital at their office in Lisbon in order to discuss the Rented Living sector in the country. Alternative rented asset classes such as Co-Living, Multifamily, and Senior Living are considered up-and-coming in many European countries, and are attracting significant interest from investors.
A rise in inflation and interest rates resulted in a reduction in family spending power, which, in turn, caused a drop in property rises in Lisbon and Porto in 2022. This is in spite of the increase in new properties sold and the fall in future supply.
This is also despite an enormous scarcity of rented housing supply, which decreased by more than 40% in both cities, potentially due to the revival in tourism (and the conversion of residential units to short-stay rentals).
Due to the recent measures announced by the government, such as the ban on Airbnb and properties standing empty, many developers, investors and landlords have lost trust in the existing legal framework and fiscal policies that govern leasing in Portugal. Thus it is expected that rents will continue to increase given the growing demand and lack of supply.
The excessive taxes and inadequate building regulations will continue to contribute to the absence of a specific Build-to-Rent product for the privately rented sector, inevitably pushing rental prices upwards. According to the attendees, there are very few BTR players in the Portuguese market. The vast majority still consider themselves "curious".
Read about Portugal’s planned Mais Habitação program and investors’ views on the subject on GRI Hub.
The year 2022 brought positive results for alternative segments, which amounted to over 300 million euros. Alternative investments comprised 9% of Portugal’s investment volume in 2022, with only another 1% going to Residential investments.