The European standard sets specific, objective criteria for justifying any possible limitations on the real estate market and short-term rentals, focusing on the relationship between housing costs and household income, the historical trend of this indicator, and supply-and-demand dynamics.

Under the European criterion, a geographic area is under stress when the ratio of the average purchase price of a mid-sized property to annual net disposable income per capita is 8 or more.

According to the most recent data, 161 of the 308 municipalities in Portugal, more than 53% of the country’s total area, meet or exceed this threshold. The seriousness of the situation is also shown by the fact that about 40% of municipalities (121) have a ratio above 10, indicating a general decline in housing affordability.

The proposal put forward by Brussels enables the identification of areas under stress at different levels, ranging from civil parishes and municipalities to metropolitan areas or tourism centres, on the condition that any restrictions imposed are strictly proportional and are accompanied by active measures aimed at increasing the supply of housing; the EU guidelines oppose general bans and stress that quantitative limits or temporary rules concerning short-term rentals do not address the underlying issues of housing shortages.

The information comes from an analysis published in the newspaper Público.