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Housing and Setting Constraints: The Portuguese Evidence

Author

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  • António Duarte Santos

    (Department of Economic and Business Sciences, Autonomous University of Lisbon and CARS—Centre for Economic Analysis of Social Regulation, Rua de Santa Marta, n° 47, 6° Andar, 1150-293 Lisboa, Portugal)

  • Hélio Castro

    (School of Engineering of Porto, INESC TEC—Institute for Systems and Computer Engineering, Technology and Science, Rua Dr. António Bernardino de Almeida, n° 431, 4249-015 Porto, Portugal)

Abstract

In the last few decades, Portugal has witnessed an extraordinary quantitative and qualitative transformation in housing provision. The pace of housing construction was so extensive that the contemporary real estate market is currently characterized by an excessive supply, vis-à-vis the resident population. In this study, we discuss the impact of the financial process on the housing sector in comparison with tenancy. We consider transaction prices of the housing assignments, either through acquisition or through tenancy. The recent shock resulting from the pandemic situation did not slow down house prices but caused a slight drop in rents. The model used proposes to analyze the fluctuations in prices and rents in the face of external shocks. In the residential market, the estimation is complex due to the many heterogeneous attributes of residential assets. Non-fluctuating variables, such as size, location, and external demand for homes, explain a large part of the variation in price levels included in the model.

Suggested Citation

  • António Duarte Santos & Hélio Castro, 2022. "Housing and Setting Constraints: The Portuguese Evidence," Sustainability, MDPI, vol. 14(18), pages 1-14, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:18:p:11720-:d:918423
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    References listed on IDEAS

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