After the serious economic crisis that began in 2007, Portugal is now on the road to economic recovery, along with urban transformation and asserting itself internationally. The capital, Lisbon, once decadent, is now going through a period of prosperity and can claim to be one of the great tourist destinations of today. However, the tourist boom has had the side effect of generating gentrification phenomena, and so currently the city is facing serious housing problems in the historical centre. Besides inflated prices, the size and quality of the housing are hindrances to a new generation trying to sell in the centre of the city.
In 2016, the historical centres of Western cities went through a second wave of gentrification, but this time due to unprecedented factors. These new arrivals didn’t have the intention of living there, but to visit for a short-term stay. With new tourist legislation radically liberalizing the hotel accommodation market, it has become possible to rent homes for a few days - transforming them into impromptu hostels - and in this manner multiplying the annual income of these building by a factor of ten. Once again, former tenants are evicted, but this time in favour of housing tourists.
And once again, it is the former owners who are most affected by estate tax, being replaced by new investors who, taking refuge from finance markets (stock markets and sovereign debt stopped being profitable due to the financial crisis that began in 2007), acquire buildings that serve as a shelter for their fortune while allowing for high return in the form of tourist rentals. In the financial contexto of today, the best position for an investor is of that of an AirBnB landlord.
In cities like Amsterdam, Berlin, Barcelona and Lisbon, this second gentrification, quicker and more intense than the previous one, has garnered fierce protests from who used to live or once to live in their old neighbourhoods. How far these demonstrations will go in terms of having an effect will depend on how willing governing bodies are to drastically change their housing policies, creating residential solutions that the real estate market is unable to offer in the current context.
After all, while historical centres represent a small and non-expandable portion of the total area of a given city, the number of tourists that visits them keeps rising from year to year - that is, a fixed, scarce supply is faced with tourist demand that is growing quickly, parallel to a residential demand that is relatively stable. In this context, the value of tourist rents will inevitably overtake that of residential rents.
Meanwhile, the globalization of the transfer of capital will allow investors to flee from stagnated economies (Brazil, Angola), from arbitrary political regimes (China, Russia, Syria), or from countries with higher taxation (France), and take refuge and monetize their fortune by investing it in real estate situated in the best urban locations of politically stable western countries. Portugal is one of the preferred destinations of these investors, thanks to the advantages given to them of generous tax breaks and golden resident visas.