Rent Out Property

only 13% of homeowners consider putting houses on the traditional market — idealista/news

Posted on by Los

The incentive to change Local Accommodation (LA) houses to traditional rentals is one of the measures provided for in the controversy Mais Habitação (More Housing) program, which was vetoed by the President of the Republic and will be reconsidered in Parliament on 21 September 2023. The truth is that only 13% of LA owners admit to doing so, according to a study carried out by Nova SBE at the request of the Association of Local Accommodation in Portugal (ALEP) and released this Tuesday (12 September 2023).

“(…) With regard to the Mais Habitação (More Housing) program, the vast majority say that they are not considering putting the property up for rent (only 13% are considering it) and a significant proportion of respondents say that there is a risk that they will close down. This expectation of closure is alarming considering that LA is an important part of income for many and that 73% are over 45, so they would find it very difficult to return to the labor market,” the two organizations said in a statement.

If, as a result of Mais Habitação, the accommodation is no longer available for rent, what is the expected use? In response to this question, which is included in the survey – based on 1,820 responses from LA owners and managers – the conclusion is that it seems more plausible that LA owners will use the house only for holidaysfor rental to foreigners, or that they will sell the property.

Still on the subject of Mais Habitação, the study, entitled “Impact Assessment of Local Accommodation in Portugal” and carried out by economists and researchers Pedro Brinca, João Bernardo Duarte and João Pedro Ferreira, concludes that a significant number of owners intend to reduce labor costs and new investments if the legislation goes ahead.

These are the other final conclusions to be drawn from the study, according to the note sent to the press by Nova SBE and ALEP:

  • Tourism has been one of the growth engines of the Portuguese economy and this growth has only been possible due to the emergence of LA, which already accounts for 40% of tourist overnight stays and whose guest spending in the economy grew by 57% between 2016 and 2019 ;
  • The impact of LA goes far beyond the sector. The study estimates that the multiplier effect of spending by guests staying in LA in 2019 contributed to 6.2% of national employment and 4.6% of GDPbenefiting numerous sectors;
  • In terms of employmentthe impact of spending by tourists staying in LA contributes 316,000 jobs to the economy and, considering this same spending by LA guests, on average each LA unit helps to create 3.8 jobs;
  • As far as LA is concerned, the study shows a very fragmented sector and a self-employment profile, with 80% of owners having between 1 and 3 units and 46% of their earnings an income of less than 1,000 euros per month. On the other hand, it shows a qualified sector where 75% have a license.

LAs account for more than half of the family budget for 39% of owners

The study also concludes that LA generates less than 20,000 euros a year for most of its owners, but represents more than half of the family budget for 39% of them.

When presenting the study’s final conclusions, Pedro Brinca pointed out that 46% of LA in Portugal generate less than 20,000 euros a year for their owners.

At the same time, this income represents “more than 60% of the family budget” for 39% of those questioned in the study, wrote Lusa, pointing out that this is one of the data points that led the team that carried out the study to conclude that LA “has been an engine of the national economy”, generating “added value” both in economic activity and in employment.

More Housing will “destroy much” and “bring little”

For Eduardo, president of ALEP, the study confirms that the governancet‘s Mais Habitação package will “destroy a lot” and “bring little to housing”.

According to the study, it emerges that “the majority [of homes in LA] are not going on the rental market, not out of fear, but because they are not suitable for it,” he says.