Food and Housing: Prices Hit New Records

Written By Araci Almeida

According to a report in the expresso newspaper of December 2, 2022, “to buy the same set of essential products you need to spend 35.60 Euros more than nine months ago,” representing a substantial increase of 19.4% since the beginning of the war in Ukraine.

These products include foods with prices that have been hyperinflated. According to the same newspaper, not even a year ago, a kilo of rice would have cost around 1.14 Euros, and that price today is already approximately 1.80 Euros. The same happens with products like fresh hake, where a kilo went from 6 euros to around 10 euros (a 78% increase).

Portugal thus becomes one of the European Union countries where food prices have risen the most. And the future doesn’t look very bright, with prices expected to continue to rise. And while inflation has been a nightmare for everyone, in Portugal, prices have also increased due to the effect of the extreme and severe drought that hit the Portuguese territory.

The lack of water means no food for humans or animals. And with a large part of the cereals being imported from Ukraine, the closing of this market and the search for other alternatives have formed the perfect mixture for a huge problem: galloping inflation that has been strangling the financial capacity of many Portuguese, who are increasingly resorting to aid to be able to feed themselves.

It is no wonder that consumers’ choices have changed, opting for cheaper products, reducing quantities, and buying fewer products thought to be non-essential.

All this has put an enormous strain on the lives of the Portuguese, who constantly have to re-adapt to this price escalation.

As such, one could say that the middle class has become poor, while the poor are now miserable, and hunger is looming over the lives of many Portuguese.

Housing, an extra quandary in Portugal

But if the food basket and how much a Portuguese intends to spend on groceries is cause for alarm, the housing situation in Portugal is as disturbing, having become the new social scourge. There are no houses, and those that exist are directed at a wealthy class that the average Portuguese will never be able to reach.

For this reason, the exceptionally high housing prices in Portugal have already removed 76 thousand people from Lisbon and Porto, two cities where, according to the same newspaper, “between 2019 and 2021 have almost seen 10% of their population leave”. 

It is mainly young people who move to the outskirts, looking for more affordable houses to buy and rent. This phenomenon makes Portuguese cities reconfigure, with their centers becoming more filled with foreign inhabitants, so-called expats or digital nomads.

At the exorbitant price of everything, no Portuguese, whose average salary, according to the National Institute of Statistics, is around 1300 euros a month, will ever be able to afford rent of around this amount.

Therefore, they move far away, even though they keep their jobs in the city centers, which implies wasting more time in traffic jams, gaining more stress, and losing their quality of life.

In environmental terms, all this is a disaster because when looking for cheaper housing, this often means being far away from transportation, implying the use of cars to go to work, which is clearly harmful to the environment.

If they are not already so, the Portuguese risk becoming service providers for a foreign elite occupying their centers and inflating housing prices.

According to Visão magazine, from December 1, 2022, housing prices in Portugal “have soared by more than 80% since the beginning of 2016”, something widespread throughout Portugal but clearly more exponential in the metropolitan areas of Lisbon and Porto.

There, prices have doubled in many parishes, and in certain areas, according to the same magazine, houses have been sold “for prices equivalent to three or four times the national average.”

All this would be fine if wages kept up with all these prices. However, wages in Portugal still need to rise so Portuguese people can return to the cities where they grew up. 

In addition, the rental market, with its exorbitant prices, presents deplorable locations. Many rooms are over 300 Euros, some without windows or natural light.

The good ones that used to be rented to students have turned over to tourists, taking these spaces out of this niche market. At the same time, the student residences are insufficient, and one is lucky to get a place in them.

This news makes life difficult for many students and their families, who either give up studying or, if they can, make endless trips from home to university, spending more than four hours a day going back and forth. It is easy to see how someone, even if young, quickly loses academic performance.

Now all this seems like just numbers, statistics, and journalistic articles if we were not living through this. But I, too, as a young person—not getting that young anymore—find myself at this enormous crossroads of getting a space of my own that I can finally call home. 

Constantly working precarious jobs, my generation has been putting life off, always hoping for better days. And even though employability may be higher now than it was a few years ago, we now find ourselves in the dilemma of not being able to afford a life in Portugal.

It is no wonder that about 30% of young Portuguese between the ages of 25 and 34 still live with their parents. Clearly, in a country with such a demographic problem, these people will also put off starting a family.

All this becomes a chain of events. The housing problem and inflation aggravate the demographic crisis in a country eager for generational renewal.

Investing in construction

Construction investment seems to be the easy way out in a country where the sector has had a massive problem restructuring itself after the 2008 financial crisis. The bureaucracy regarding licensing, always delayed in the city councils, makes the product more expensive in a world where time is clearly money.

From personal experience, being the daughter of an ex-builder and the sister of a civil engineer, the 2008 crisis was just the culmination of a problem that started to be visible at the beginning of the millennium.

And if now there is a shortage of houses and buyers, the feeling twenty years ago was that there were plenty of houses but a lack of people to buy them. This resulted in the indebtedness of several construction companies that dissolved and never opened again. 

On the other hand, there is a considerable lack of workforce in the sector. There is no investment in professional schools to train people for this sector. But it’s easy to understand why no one wants to follow this career. It’s not attractive; a tough job with meager salaries doesn’t make anyone want to dedicate their lives to it. 

This is a paradox since houses are sold at million-dollar prices, but those who make them, now mainly African immigrants, continue to have miserable salaries and, in many places, also poor working conditions.

Population imbalance 

This whole housing situation is again aggravated by the maldistribution of the Portuguese population. We have an increasingly overloaded coastline and a more desertified interior. And on the coast, where the territory for construction is already limited, prices clearly tend to rise. 

Meanwhile, less inhabited areas are less attractive for various reasons (no leisure options, no job opportunities, poor access), becoming, in many cases, dormitories and putting more pressure on an already overcrowded territory.

With such an incipient economy and uncompetitive wages, the struggle for fundamental rights such as food and housing has become a real burden in the lives of the Portuguese, who constantly worry about being able to feed themselves and have a roof over their heads.

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