Finding a Place to Live – Part One
Finding a Place to Live – Part One
The Housing Situation in Portugal
Currently in Portugal, there is more demand than supply when it comes to housing. Not only are Portuguese citizens searching for (affordable) housing, but many applicants for resident visas are looking as well. Over the last several years, prices for properties to purchase or to rent have skyrocketed leaving some to wonder if they can even afford to live in Portugal.
Having been through this process, Paul and I know firsthand the frustration and anxiety with trying to find a suitable place to live and how stressful the process can be to find something to fulfill the resident visa requirements (in our case, the D7 visa). Less than 2 months before our VFS appointment in San Francisco (we should have started earlier), we began looking online on several Portuguese real estate websites such as Idealista and Imovirtual. The more we looked, the more confused (and desperate) we became.
This article is part one of two articles focused on the current housing situation in Portugal along with tips on how to find a suitable place to live if you’re a resident visa applicant1. The primary focus of these articles is on renting, but those who are considering purchasing a property in Portugal may find some of this information helpful as well.
I’m not an expert – and full disclosure.
Since I am not a housing expert, I decided to speak to someone who is – Olivia Houssiaux. Full disclosure: Paul and I hired Olivia and her team in 2021 to help us find an apartment to rent in Portugal. My articles are not endorsements, and I am not compensated – there are other companies and realtors specializing in relocation - but since many of my subscribers ask to read about our personal experiences, for the record, both Paul and I can attest to the professionalism and experience Olivia and her team provided for us. As always, it’s your responsibility to do your own due diligence.
Meet Olivia Houssiaux of Gateways Portugal by Olivia H.
Olivia Houssiaux is the founding partner of Gateways Portugal by Olivia H., an investment consulting and property management firm. The focus of Gateways is primarily on property investment, acting as buyers’ agents. When clients hire Olivia and her team, there’s no conflict of interest because Gateways does not hold or represent any real estate.
Olivia herself is an expat. She was raised in a family that moved to a new country every 4 years. She is fluent in Portuguese, English, Spanish, French, and German. She holds a BA in Management and Portuguese from the University of Leeds. Prior to forming Gateways, Olivia was a co-founder of a property management company and a board member in an investment consultancy firm.
Relocation and renovation.
One service Gateways provides is relocation (this is the service Paul and I hired Portrait for). Among the services Gateways can provide is helping clients find rentals, help with shipping belongings from the client’s home country to Portugal, assist with documentation, leases, schools, utilities set up, furnishings and anything else that is needed for relocation.
The firm also has an in-house renovation team to assist clients with renovations. For example, if a client purchases a ruin, the Gateways renovation team manages everything from outlining project goals to planning. They are the liaison to contractors and suppliers on behalf of the client.
The majority of Gateway’s clients (many of whom are from the United States), are applying for D7 visas. Their ideal client is a foreigner who wants to move to Portugal; or a foreigner who is already living in Portugal. Gateways is a boutique service focused on helping clients connect all the loose ends so that the client doesn’t have to worry about that aspect of moving to Portugal. There are so many little things that are different whenever you move to another country. Gateway’s services are geared towards making that transition easier and less stressful.
Current trends and prices in the Portuguese rental market.
Olivia notes that rental prices have been creeping up over the last 6 years. And there hasn’t been any slowdown, especially in the larger cities. This is not as much the case if you go inland where regardless of whether you want to rent or to buy, prices are lower and more stable.
Although there has been some movement by the government and other stakeholders to address the housing shortage and to stabilize housing prices, not much has been concluded and many aspects of this reform remain in the ‘gray zone.’
Especially for long-term renting, there’s a big problem in Portugal with houses that remain empty. For example, when you walk around Lisbon, you’ll see construction and renovated buildings next to abandoned buildings. The abandoned buildings are either because relatives are fighting for an inheritance, or because the buildings have been seized by the government at some point in time.
So, there’s a high demand for long-term housing and a short supply which means that everyone is doing whatever they want with prices. And until that gets balanced, Olivia believes this trend will continue.
The government is slowly starting to impose a few rules, but bureaucracy tends to get in the way of any real improvement.
A cheap gateway to Europe.
Olivia points out that ten years ago, no one knew about Portugal. There were no fiscal advantages to moving or investing in the country. Since Portugal relies on tourism as its primary industry, for the last 7 years or so, Portugal has been marketing itself as a tourist destination as well as a country to live and invest in. So, according to Olivia, the government implemented incentives for visas and essentially created a cheap gateway to Europe. Olivia has come across many people who start out in Portugal (to get residency or citizenship making it easier to live in the European Union), but with the intention of eventually moving to another European destination.
Historical perspective.
She points out that it’s important to note if you take a look at Portugal’s large cities, the same thing happened in London and Paris 60 or 70 years ago, where the centers of the cities became the centers for tourists and the cities themselves expanded, with more condominium units being built on the outskirts of the cities. So right now, Olivia feels that Portugal is in the midst of these types of changes.
Europe (including Portugal) has a standards problem.
As more people moved to Portugal the expectations increased, and prices started going up. Olivia notes that if you compare the standards of European countries to other service-based countries, you’ll notice Europe lacks the standards that people from these other countries are accustomed to. For example, in Europe, the standard has been to live in an apartment where you must climb 4-5 flights of stairs (heck even Emily in Paris’ apartment building had several flights of stairs), where there is no central heating and no air conditioning, where in winter inside is colder than on the outside, where the refrigerator is tiny and you dry your clothes on a line or a rack - those have been the standards. But with more people moving to Portugal from countries such as South Africa, United States, or Brazil - where standards there could include a door attendant, air conditioning, heat, elevators, full-sized refrigerators, washers and dryers, and plenty of parking, therein lies a problem for Portugal. Olivia argues if Portugal wants to continue to attract foreigners to live long-term in the country and continues to charge high prices, standards will have to meet the expectations of those moving here. Either that, or people moving to Portugal will have to shift their expectations.
What about bidding wars for rental properties?
I had read somewhere that in certain instances, people desperate for a rental to fulfill their visa application requirement in Portugal were actually bidding up the original asking price just to get it. So, I asked Olivia if this was the trend. She outright answered that she is fully against this practice as it’s not part of the culture in Portugal.
In the past, she said, a potential tenant was given a price and you negotiated downwards. Five years ago, she said, you would have had about a 10% margin with which to negotiate. Although she has only had to bid up once for a client who really wanted the apartment, she is against this practice and has not come across this very often.
Having said that, she doesn’t challenge negotiations now in the current market and there are no negotiations, especially in the larger cities. In smaller villages, you can still negotiate but not in the larger and more popular cities (such as parts of the Algarve, Lisbon, Cascais, Porto). The price is the price. There’s no point in trying to negotiate because the property is going to go fast. A prospective renter is more than likely going to be one out of ten prospective renters.
Of course, she points out, a lot depends on the real estate agent and the property owner. You have greedy ones (property owners), you have rational ones, you have irrational ones. You have some that know a lot about the real estate market and some who don’t.
She strongly advises her clients not to enter a bidding war because it will turn this practice into normalcy in Portugal.
Many Portuguese property owners have no idea what a D7 visa is.
In our case, our Portuguese landlords had no idea that foreigners were moving to Portugal to live. They didn’t know what a D7 visa was. They were shocked to learn that this type of visa can lead to permanent residency or citizenship.
Think about it. Do you know the different types of visas for people wishing to live and work in your home country? I don’t.
That’s why Olivia feels that it’s particularly important to get to know the property owner even more so than the real estate agent. Because at the end of the day, this is the person an expat is going to have to deal with. The culture here is built on relationships and trust and to be face-to-face when having conversations.
The rental market is tight she says because real estate agents are less interested in the rental market than in the selling market (makes sense to me). Right now, a lot of foreigners are buying, and realtors are focused on that since the commissions for selling versus renting is significantly different.
Olivia points out that this is another reason why her firm is paid for by the client so there’s no conflict of interest.Culture shock for U.S. foreigners.
About 80 percent of Gateway’s clients are American and many experience a culture shock when renting (or buying) a property because they’re accustomed to how things work in the U.S. For example, foreigners may find it difficult to accept the culture, especially if they have a problem with a landlord. Contracts are all similar and they all follow the law, so for as much as landlord and tenant laws exist, bringing on a lawsuit against a landlord in Portugal would take an exceedingly long time and would be expensive. It is rarely done in Portugal and practically non-existent. Olivia suggests that if there are problems with a landlord and if issues cannot be resolved face-to-face, that it’s often better (and cheaper) to walk away than try to sue.
Know who you’re dealing with.
It's crucial to have trust and transparency going into a rental contract, Olivia said. That is why it’s important to her and her team when they’re representing a client, that they try to meet the property owner. Olivia wants to know who they are, and where they’re from.
The language barrier and communicating with the landlord.
Communication is essential to practically everything in society. So, what do you do if you need to communicate with your landlord? Sometimes a language translating service such as Google Translate or DeepL won’t always translate the words or phrases correctly, and you don’t want to offend your landlord by unintentionally saying the wrong thing. Paul and I understand this firsthand because our landlord speaks little English and we speak marginal Portuguese.
Olivia suggests that you ask a friend or colleague who speaks Portuguese to help you communicate with your landlord if there’s a language barrier. And these communications, she points out, are better done in person, face-to-face than over the telephone – the Portuguese way of conducting business should be respected.
Current trends for buying a property in Portugal.
I asked Olivia if she could tell me about the current trends for buying a property in Portugal. She said that many of the trends for buying are exactly like the current rental market trends. But she did point out a few important tips for buyers to note:
There’s no guarantee that everything will be working in a house/apartment. And the owner may not agree to fix/repair anything. Home inspections in Portugal are not what they are like in the United States.
Just because you view a property with lighting fixtures intact, sinks, cabinets, or appliances doesn’t necessarily mean that those items will be in place when you make a purchase agreement. They are often removed. Buyer beware.
If you’re purchasing a condominium (apartment), ask for the documents pertaining to covenants, conditions, and restrictions (CC&Rs). Also ask to see bylaws and rules. It’s important to be sure that the condominium association is solvent. The last thing a potential buyer needs is to learn that many of the condominium owners have unpaid condo fees or taxes and that the building is underfunded. You don’t want to get an assessment fee for major condo repairs.
Be prepared to pay for an energy certificate.
Know the legal property specifications. This includes the legal address of the property, the county or municipality it is in, and the legal square meters of the property. Olivia points out that for example, property owners may add the square meters of an attic to double the size (and value) of the property. Illegal square meters are common. Illegal terraces are common. She notes that the legal square meters should be in alignment with the asking price of the property.
Coming up in Part Two:
My interview with Olivia Houssiaux will continue in Part Two – Finding a Place to Live including:
Tips for finding rentals in Portugal.
Average prices for rents in Portugal.
The documents you’ll need to prepare to rent in Portugal.
Leases and increases.
Portuguese real estate terms to know.
If you'd like to get in touch with Olivia and her team: Gateways Portugal by Olivia H. Email: gatewaysportugal@gmail.com Phone: +351 938 674 488
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A special thank you to Anonymous for supporting Our Portugal Journey through Buy Me a Coffee. I truly appreciate it!
Until next time…
Obrigada!
Carol.
One of the most stressful aspects of moving to Portugal is to secure suitable housing to fulfill the D7 visa application requirements (and some of the other visa types). Generally speaking, applicants are required to provide proof of accommodation in Portugal for a minimum of one year. This can be in the form of a rental or purchase contract.
Always comprehensive and well done! Thank you for, once again, providing incredibly helpful information!
Your articles are at a perfect time for my husband and me in our plans to relocate, thank you. We were just discussing these types of services, knowing we will need them to move from Florida to the Algarve, so thank you and I look forward to Part 2!