Airbnb Finds Love in Lisbon

Mon 6 Jun 2016

Bloomberg Technology's recent article on how Airbnb is taking Lisbon by storm attests that Portugal's capital city is a great place to invest in the holiday rental market.

 

"On his way to work, Lisbon Mayor Fernando Medina likes to count the dwindling number of empty buildings. Thanks to a tourism and real estate market boom, many are being converted into trendy apartments that cater to the growing number of visitors to the city.

As some European cities impose restrictions on short-term rentals via websites such as Airbnb to keep housing affordable and protect residents from noisy visitors, Lisbon is taking steps to make it easier. Government measures including phasing out rent controls and selling hundreds of those empty buildings at public auctions have helped support a rebirth of the city.

“This is the first time that tourism is allowing many people to participate in the development process of the city,” Medina, 43, said. “We shouldn’t be scared of this new dynamic, we shouldn’t be afraid of growth. On the contrary, we need to prepare the city to take in even more tourists.”

While Lisbon currently requires all hosts to register their units as short-term rentals, it allows them to rent out their properties for an unlimited amount of nights per year. That’s less restrictive than the 90 nights allowed in London and 60 in Amsterdam for private owners. All three cities are still more welcoming than Barcelona – which stopped giving out short-term letting permits in 2014 – and Berlin, which all but banned the practice in May for landlords who want to rent out their entire properties to tourists.

The difference between Lisbon and those cities is that the Iberian capital needs the visitors. Two years after exiting its financial bailout, unemployment is still at a staggering 12 percent and tourism is an increasingly important part of the economic recovery.

The number of nights spent by foreign tourists in the city known for its yellow trams rambling through cobblestone streets increased 21 percent in March from the same month last year. Airbnb’s listings in the Lisbon metropolitan area nearly tripled since January 2014. TheLisbon property marketboom is turning homeowners into hoteliers and actors into concierges, while lining the country’s coffers with the 15 percent tax it collects on each booking.

"Portugal is one of the leaders in Europe addressing the regulation of the sharing economy," Andreu Castellano, Airbnb’s public relations manager for Spain and Portugal, said in an e-mail.

Getting others to follow Lisbon’s lead will be critical to Airbnb’s success in Europe. The region generated about $3 billion in revenue for its hosts last year and accounts for more than half of both the site’s travellers and landlords, the San Francisco-based company’s Chief Technology Officer, Nathan Blecharczyk, said May 24 in Amsterdam. The European Commission last week issued guidance to EU countries for how to tackle the “patchwork” of rules that collaborative platforms such as Airbnb face in the bloc.

Lisbon’s approach is helping people like Hugo Almeida. Two years ago, the 34-year-old moved in with his grandfather in Lisbon and began renting his one-bedroom apartment to tourists. He now makes more than 10,000 euros a year before taxes from his rental, about the same as what he earned as a butcher. He has since quit his job to learn how to be an electrician. When he’s done, Almeida said he “will probably end up renovating apartments for tourists."

The Lisbon real estateboom receives its share of grumbling, of course, from locals who complain of being priced out of their neighbourhood homes and of noise from visitors on different hours than those of working people going about their daily lives.

"Nobody cares about the residents, they just want to get money,” said Jose Alves, one of the last original residents of a building on the foothills of Lisbon’s St George’s Castle, whose river view has made it a hot spot for short-term rentals. “The gentleman on the second floor died a few days ago. Let me tell you, the man’s son will end up renting the apartment to tourists or selling it for a fortune.”

Still, the gains for the city from the increase in real estate investment and tourists has been much greater than the drawbacks, said Mayor Medina. Tourism accounts for about 15 percent of Portugal’s GDP. In Lisbon, the number of guests who spend the night at hotels and other accommodations has grown at an average of 13 percent a year since 2013, according to Portugal’s National Statistics Institute.

“This process creates a series of significant changes to the city,“ said Medina. “Most of them are positive.”

It’s brought more foreign investment – non-Portuguese people accounted for 90 percent of the record 2 billion euros invested in Portugal real estatelast year, double the amount in 2014, according to Cushman & Wakefield. That’s helped push Lisbon property prices higher, increasing as much as 25 percent in some areas since 2013. It’s also playing a role in helping Lisbon attract big conferences such as November’s Web Summit one of the world’s biggest gatherings of start-ups.

Take a look at the many properties available through Tamea International to find your next home or short-term rental that could be an income generator through Airbnb.

 

Read the full article by Henrique Almeida here.

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