According to a report by idealista/news, the number of home sales fell by 20% and housing prices dropped by 9% between the announcement of the ban and its implementation at the end of 2019, according to a study by the Francisco Manuel dos Santos Foundation.

Initial boom

With the entry into force of the law that came to regulate the operation of local accommodation in 2014, the number of properties registered in Portugal soared, with emphasis on Lisbon, which concentrates more than 20% of the total number of properties registered for short-term AL. And its effects were quickly felt. “The rapid growth of short-term rentals has coincided with that of real estate prices”, highlights the study.

The historic centre of Lisbon was the area that saw “the biggest increases in sales prices and rents”. And it was precisely this “rapid and uneven” rise, along with concerns related to the expulsion of downtown residents, that generated a public debate about the “merits” of the short-term rental market in 2017, recalls the study.


It was after, in 2018, the Parliament opened the legislative door to the municipalities to regulate new real estate registrations, that the Lisbon City Council decided to suspend, in November of that year, new registrations in areas where the density of local housing was high, above 25%. The so-called containment zones covered Bairro Alto, Madragoa, Castelo, Alfama, Mouraria, Colina de Santana and Graça. Later, also in Baixa, Avenida da Liberdade and Avenida Almirante Reis.

Recently, the Lisbon Chamber approved a new restriction on AL: in 14 parishes in the capital, new AL registrations will be temporarily suspended while investigations into the impacts are studied further.

What are the consequences?

Between the announcement and the implementation of the ban on new ALs - which took place between the first and third quarter of 2019 -, there was “a 30.9% increase in the number of registrations in the originally treated areas, when compared to adjacent ones”, concludes the study. And the increases were greatest in homes with fewer bedrooms. Local accommodation prices, however, do not seem to have reacted to the ban, at least in the short term.

The results of the study now released point to “a reduction of about 20% in the number of transactions of homes in the treated zones” between the third quarter of 2019 and the period before the measure was implemented. And, at the same time, “prices dropped by 9%, which is a strong indicator that the option of renting housing in the short-term market is an important determinant of demand in tourist areas”, they conclude. In both cases, the effects seem to be concentrated in the two-bedroom houses.

“Not enough”

Although these results reveal “considerable effects of tourism and short-term local accommodation on the real estate market”, they also show that “these phenomena do not seem to be sufficient to explain, by themselves, the increases in housing prices in the city of Lisbon”, the study states. In other words, “the ban on new registrations is not enough to reverse the price increase of the tourist boom years”, they conclude.

The Francisco Manuel dos Santos Foundation assumes that “the problem of housing in the centres of large cities has been deteriorating in recent years”. And to face it, in addition to the suspension of ALs in Lisbon, there must be “a broad set of complementary public policies”, they argue.