Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Like Spain, Portugal Hopes To Make Cuts, But It Is Mired In Structural Weakness

Recommended Posts

http://www.nytimes.com/2010/05/14/business/global/14portugal.html?ref=business

José Gago da Graça owns a Portuguese real estate company and has two identical apartments in the same building in the heart of Lisbon. One rents for 2,750 euros ($3,480.21) a month, the other for almost 40 times less, 75 euros ($94.91).

The discrepancy is a result of 100-year-old tenancy rules, which have frozen the rent of hundreds of thousands of tenants and protected them against eviction in Portugal. Mr. Gago da Graça has been in a lawsuit for a decade over the apartment that rents for 75 euros. It started after his tenant died in 2000 and her son took over and refused to alter his mother’s contract, which dates to the 1960s.

“We’re the only country in Europe that doesn’t have a free housing market, and that’s just amazing,” Mr. Gago da Graça said.

Rules like these, which economists also blame for contributing to Portugal’s private debt load, help explain why this nation of 11 million has followed Greece and Spain into investors’ lines of fire.

The Portuguese government on Thursday copied Spain’s lead in agreeing with the main opposition party on more austerity measures to cut the deficit faster than planned, to 5.1 percent of gross domestic product next year from 9.3 percent last year.

To help restore investor confidence, José Sócrates, the Socialist prime minister, will rely on tax increases and cuts in wages and corporate subsidies to erase 2.1 billion euros ($2.7 billion) more from the deficit. “These measures are necessary to obtain what’s essential, the financing of the Portuguese economy, but also to defend the euro,” Mr. Sócrates said.

Overhauling the tenancy rules, however, was not part of Mr. Sócrates’s latest plan. One fear among investors is that governments across the developed world do not have the courage and power to tackle such longstanding structural weaknesses.

Perhaps this law expected permanent low inflation over 100 years?

I'm not surprised the son didn't want to change the contract, who would apart from the landlord.

Share this post


Link to post
Share on other sites

http://www.nytimes.com/2010/05/14/business/global/14portugal.html?ref=business

“We’re the only country in Europe that doesn’t have a free ripoff housing market, and that’s just amazing,” Mr. Gago da Graça said.

To help restore investor confidence, José Sócrates, the Socialist prime minister, will rely on tax increases and cuts in wages and corporate subsidies to erase 2.1 billion euros ($2.7 billion) more from the deficit. “These measures are necessary to obtain what’s essential, the financing of the Portuguese economy, profits of international bankster gang"

Corrected translation from Portuguese.

Share this post


Link to post
Share on other sites

http://www.nytimes.com/2010/05/14/business/global/14portugal.html?ref=business

Perhaps this law expected permanent low inflation over 100 years?

I'm not surprised the son didn't want to change the contract, who would apart from the landlord.

That is brilliant, if only rents had been similarly 'fixed' here in the UK, no one would need to buy and there would be far less speculative purchasing of property.

Just think of all the 'extra' money that would be going into the economy too, rather than going to the banks in the form of interest payments.

Share this post


Link to post
Share on other sites

I've printed that off to show to a friend of mine who regularly goes to the Algarve. He's mentioned to me that he can't understand how the locals afford to live there, the prices are ridiculous and the wages are low. It seems the solution is to rent, and never move.

Share this post


Link to post
Share on other sites

Perhaps this law expected permanent low inflation over 100 years?

I'm not surprised the son didn't want to change the contract, who would apart from the landlord.

What you cite could be just an extreme (how extreme?) instance of the "once you're in" privilege of social housing in the UK.

Share this post


Link to post
Share on other sites

Corrected translation from Portuguese.

That's not true.

Several EU countries have rental controls, just not ones that are loaded this much against the landlord

tim

Edited by tim123

Share this post


Link to post
Share on other sites

That's not true.

Several EU countries have rental controls, just not ones that are loaded this much against the landlord

tim

And what is economically superior, in Your opinion? Rent controls or no rent controls?

Share this post


Link to post
Share on other sites

http://www.nytimes.c...ml?ref=business

Perhaps this law expected permanent low inflation over 100 years?

I'm not surprised the son didn't want to change the contract, who would apart from the landlord.

any country you can think of will have hundreds of reasons why they cant cut.

and so will any bankrupt you can think of.

but without money...

Share this post


Link to post
Share on other sites

Its a bit like parts of New York that have rent control, restrict the price that can be paid for housing and suddenly a shortage appears!

Share this post


Link to post
Share on other sites

Its a bit like parts of New York that have rent control, restrict the price that can be paid for housing and suddenly a shortage appears!

Just like the UK, we have a massive housing shortage here....

edited to increase sarcasm level.

Edited by alexw

Share this post


Link to post
Share on other sites

Just like the UK, we have a massive housing shortage here....

edited to increase sarcasm level.

Not really a shortage of BTL investors though. :P

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.