The 7th edition of the ALP – Associação Lisbonense de Proprietários Barometer “Confiança dos Proprietários” reveals that more than two in every ten owners did not update their annual rent for 2024 using the legal coefficient of 6.94%.
According to the sample, which mobilized more than half a thousand responses between March 14th and 22nd, 21.4% of owners did not carry out this increase permitted by Law.
The barometer states: “If it is true that around a third of the respondents did not do so because they had contracted by mutual agreement another annual coefficient in the lease contract, it is worth highlighting the 14% of respondents who responded that they preferred to update the rent in another percentage value , understanding that the coefficient calculated by the National Statistics Institute (INE) for 2024 could put its tenants in default”.
He adds: “another ten percent kept the rent unchanged because they considered that any increase would be unaffordable for tenant households. In addition, nine percent of respondents decided not to make any increase because they currently have an income that allows them to have a comfortable life, without the need to take away purchasing power from tenants.
Nine out of every hundred sold homes they had on lease
The ALP management highlights in this 7th edition of the association’s Barometer “two phenomena that have gained ground, and reveal a lack of confidence in the rental market over the past year, greatly marked by the instability caused by the “More Housing” package – he adds. Namely: “Practically nine percent of respondents claim to have sold properties that were subject to traditional leasing. To these are added almost six percent of landlords who reveal that they have transferred properties that were placed in traditional rental to short-term rental — such as accommodation for students, foreign professionals or digital nomads”.
Half (50%) of respondents believe that real estate and rental is a market with increasingly less attractive margins. A large proportion of owners (43%) consider real estate and leasing to be bureaucratic and difficult to understand. For 29%, it is an investment that requires excessive operating costs, but still, for almost a quarter of respondents (24%), it is a profitable and safe market to invest in.
Despite the reformulation of affordable rental programs and the creation of even more attractive programs, such as the “Rent to Sublet” Program, created within the scope of the “More Housing” package, according to the responses collected by the ALP Barometer, only two percent of respondents signed contracts under these programs.
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A quarter of landlords with rent arrears
The survey of landlords confirms that the “value of non-compliance has remained consistently high throughout the seven editions of the ALP Barometer. Almost a quarter of landlords (23.6%) deal with the phenomenon of non-payment of rent by their tenants.
The biggest change compared to the last six editions is the fact that the share of landlords who have defaulted on rent for more than six months leads overall among those who are suffering losses of half a year. In this sample, 30.3% of owners have rent arrears. Those who accumulate two to three income losses represent 28% of the responses.
Even so, “less than half of landlords (48.7%) who are faced with breach of contract consider instructing an eviction. Of those who will not go to court to assert their rights, the largest proportion of responses (25%) say that it will take time and will cost more than the amount owed by the tenants”.
For 18% of owners, resolution always goes through extrajudicial means and there are 15.6% who understand the economic and social situation that tenants are going through. There are 17% of the sample who believe that justice always favors tenants, even in cases of flagrant non-compliance. Four percent of respondents say they do not have the means to access justice.
Portrait of the Portuguese owner — “Landlord by inheritance”
Similar to the demographic portrait presented in previous editions, the owner “profession” is aging. Roughly half of the sample (48.2%) is elderly, over 65 years old. The most relevant segment of respondents, representing a third of the sample (33.9%), is, in fact, those aged 65 to 75. More than a quarter of the sample (27.8%) falls into this age group (between 55 and 64 years old). There are only 1% of young owners aged up to 34 years.
The Portuguese real estate market is made up of small property owners. More than half of the respondents (51.4%) own up to five properties. More than two thirds of the sample (76.4%) have up to ten properties. Seven out of ten owners became landlords because they inherited the properties they currently own. More than a third of ALP Barometer respondents invested their savings in rental properties as part of a retirement plan.
The overwhelming majority of respondents (93%) have residential properties placed on the traditional rental market. Significant – according to the barometer – “is also the percentage of owners who own non-residential properties that are rented (38%). The reality of property in the Portuguese market places rustic properties in third place (15%). Next comes Local Accommodation, a reality for 11% of respondents and finally properties allocated for rent to students (7.6% of responses)”.
There have been no changes in income since the previous editions of the Barometers that the ALP has carried out since 2021. More than half of landlords earn up to three gross national minimum wages (2460 euros) from the properties they have placed on the rental market.
Reading the new political cycle
The country turned “to the right” and property owners unequivocally contributed to the results of the legislative elections on March 10th. According to the sample, 96% of homeowners went to the polls, 66% of whom voted for parties from the right. The democratic right absorbed the overwhelming majority of these votes (48%), followed by the liberal right, with more than 11% of the responses.
If it is true that 43% of respondents say they are satisfied with the results of the elections, 45% do not believe that this legislature will come to an end.
46 percent of the owners interviewed gave the benefit of the doubt to the Government led by Luís Montenegro, responding with a “maybe” to its longevity.
In terms of alliance politics, 44% of property owners defend a right-wing bloc coalition, with the three parties united.
