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Real estate is priced at the margins, because it's rather illiquid. Here's an estimate, there are about 10M people living in Portugal, maybe 5M living in areas

Real estate is priced at the margins, because it's rather illiquid. Here's an estimate, there are about 10M people living in Portugal, maybe 5M living in areas (cities, coasts) where wealthy foreigners might want to settle. Average 3 people per household, that's 1.6M homes. Housing vacancy rates in desirable areas are usually 1-3%, so maybe 15-45k available homes at any given time in desirable areas. An influx of a few thousand extra wealthy people (say 3-5k, not just Americans) in a short period of time could certainly have an impact on current vacant housing prices, which might last a good number of years (prices tend to go up quickly, and down slowly).

wyager 4y ago
A much more significant causal factor is probably the aggressive devaluation of other monetized (in the sense of serving-as-(ersatz-)money) assets like equities and national currencies. Real estate is one of the only good investments when governments are doing crazy stuff like shutting down the economy and writing big checks to stay at home.
pas 4y ago
The big blind spot is urbanization, which is ongoing. Internal migration is the vast majority of the numbers. Of course they are less wealthy - almost by definition - than the foreigners who take a lot of apartments. I don't particularly care about Airbnbs, but the general problem of underbuilding (in cities proper) is enormous and most people don't even acknowledge it. :|
QuarterReptile 4y ago
Presumably demand also has some elasticity. There may be a set number of bedrooms, but if prices go up enough, more people make roommates work, forgo the guest bedroom, or sleep more children to a room.
- fshbbdssbbgdd 4y ago
  This is a real factor, and it’s good that it prevents people from ending up homeless. However, making lifestyle changes like this definitely stings hard enough to make people angry at the foreigners.

wyager 4y ago

A much more significant causal factor is probably the aggressive devaluation of other monetized (in the sense of serving-as-(ersatz-)money) assets like equities and national currencies. Real estate is one of the only good investments when governments are doing crazy stuff like shutting down the economy and writing big checks to stay at home.

pas 4y ago

The big blind spot is urbanization, which is ongoing. Internal migration is the vast majority of the numbers. Of course they are less wealthy - almost by definition - than the foreigners who take a lot of apartments. I don't particularly care about Airbnbs, but the general problem of underbuilding (in cities proper) is enormous and most people don't even acknowledge it. :|

QuarterReptile 4y ago

Presumably demand also has some elasticity. There may be a set number of bedrooms, but if prices go up enough, more people make roommates work, forgo the guest bedroom, or sleep more children to a room.

fshbbdssbbgdd 4y ago
This is a real factor, and it’s good that it prevents people from ending up homeless. However, making lifestyle changes like this definitely stings hard enough to make people angry at the foreigners.