tsai3904
02-02-2011, 07:03 PM
http://www.bloomberg.com/news/2011-02-03/portugal-crumbles-as-century-old-rent-controls-choke-property-investment.html
Parts of the article:
Century-old controls on rents and evictions are stifling investment in Portuguese real estate and leaving the country with crumbling city centers as rental income fails to keep pace with maintenance costs, according to landlords and property industry groups.
Owners of rent-controlled properties don’t get enough income to support their upkeep, leaving Lisbon and other cities pockmarked with crumbling structures, Aecops said. It estimates that about 36 percent of the country’s residential buildings are in need of repair.
The lack of incentives to invest in renovation has caused a chronic shortage of rental accommodation, which now represents less than 20 percent of Portugal’s total housing stock, Menezes Leitao said. That has forced people to buy property instead, boosting debt and pushing up home prices.
“They couldn’t rent, so they bought and borrowed too much money,” he said. “It’s a contributing factor in the current crisis.”
Parts of the article:
Century-old controls on rents and evictions are stifling investment in Portuguese real estate and leaving the country with crumbling city centers as rental income fails to keep pace with maintenance costs, according to landlords and property industry groups.
Owners of rent-controlled properties don’t get enough income to support their upkeep, leaving Lisbon and other cities pockmarked with crumbling structures, Aecops said. It estimates that about 36 percent of the country’s residential buildings are in need of repair.
The lack of incentives to invest in renovation has caused a chronic shortage of rental accommodation, which now represents less than 20 percent of Portugal’s total housing stock, Menezes Leitao said. That has forced people to buy property instead, boosting debt and pushing up home prices.
“They couldn’t rent, so they bought and borrowed too much money,” he said. “It’s a contributing factor in the current crisis.”