Tourism is annoying to residents wherever it happens. The worse it gets, the more money is generated.
Our village on the west coast would be dirt poor without it. I always say we don't like it or profit directly, but it paves the roads and keeps water in the pipes.
I have seen places totally wrecked by tourism; peaceful beautiful places turned into strips of bars and dance clubs, litter everywhere, prices so high that the locals had to leave.

The last part is happening here too, but maybe the ban on new tourist rental permits will change that.
Of course anything that benefits one disadvantages another.
Some houses that were under (re)construction are now frozen with "vende" signs on the half done work.
The fact is that in rural areas there is very little employment that pays enough to cover a mortgage, even if prices are forced lower.
And what work there is, is construction and tourism.

What I find strange is that anyone can buy land in Europe and there are no restrictions like you'll find in many Asian countries. Unless something changes soon, I don't see it getting better and a growing tourism sector just means more jobs that don't pay enough.

There's been a lot of noise about Asians buying property and pushing up prices; but the actual volume is low and the properties bought are generally high end, over 500,000.
Restrictions on property ownership and rentals are popular, but nearly always backfire, leading to further housing shortages and higher prices for everyone.
This is all well known, yet governments everywhere keep right on passing populist restrictions on capitalism that can never work in a capitalist system.

Personally I have benefited from that a lot, as my property values and rental income have been pushed higher by botched government attempts to push it lower.
Each time they meddle, supply gets lower and demand goes higher.

Having said that, I do believe there has to be controls, particularly between residential and tourist housing. It hurts, but it just has to be. I don't like these total bans, there should be some sort of formula that allows limited tourist rentals in a reasonable way while preserving enough housing for residents.
There are many areas with more houses than residents though, so not allowing these to be used as tourist rentals means the residents that are there will lose their income.
These things are complex, and need good governance.
That's difficult.

Yes, service jobs have low salary and little security; on the other hand, people just need jobs. If demand for labor rises, so will wages.
Rural areas have been poor for a long time, ever since mechanized farming killed the value of produce and much of the need for farm labor.
Few even want to work that hard these days (and I sure don't blame anyone for that).

Life is pleasant in the countryside, but money is more and more concentrated in cities.

Not saying that many Asians are buying yet, just that it's strange we don't have similar regulations like Asia. When you consider how small Europe is, giving away more and more land doesn't seem like a good idea.
In 20 years Portugal will be flooded with Asian buyers and it's only early days. Even Americans are just starting to explore Portugal and in recent years more and more Americans have bought properties.

Although stopping the golden visa might reduce permanent residents, it doesn't mean people stop buying land.
https://www.euronews.com/travel/2022...e-euro-is-weak

Prob for a country like Portugal is that they have always relied heavily on taxes from property. Both purchase tax and all of the VAT and personal taxes.
So unless PT has another way to make up for a reduction in tax receipts regarding property, then it will continue to allow building.
As long as Northern Europeans continue to seek out sunnier climes there will be willing buyers, and if they stop building then Spain/Canaries will take up the slack or property prices will continue to rise (as long as Banks keep lending!!!)....prob I suspect is that buyers are looking for `Investments` rather than homes to live in,giving rise to massive rental market.
But for sure allowing AirBnB, and holiday lets can be a pain for 365 residents, I know only too well. Maybe a heavier tax burden on renting would reduce the numbers, and values would then drop accordingly.

I may well be wrong but I think it would be quite difficult for any member state of the EU (which has, as discussed in some detail recently, rules (upheld in practice by the ECJ) about free movement of capital to and from outside of the EU as well as inside) to impose any sort of ban on foreign investment in or ownership of property or land.

I'm not all that sold on the idea of the government always having been reliant on the taxes arising therefrom, although I'm sure they're not turning their noses up at the revenue currently being generated.

I don't think taxes on renting would have the right effect - just make it more expensive for tenants, with consequent problems associated with the fallout from that. The landlords certainly aren't going to pa extra taxes without passing them on.

Pretty much the only way I can see of resolving things is to impose rent controls. De-couple the cost of renting from the price of property and simultaneously make short-term renting less attractive, and also discourage speculation via aggravated CGT on properties held short term or not bought for the purposes of owner occupation. And invest big time in both non-residential tourist accommodation and residential accommodation for those who need it.

But money and priorities ...

Some camaras make a significant portion of their income from property sales tax (which goes to the camara). So the more often a property is sold, the better they do.
Those expat villas can change hands often, so areas popular with foreigners do well from that.

Build more? It's not allowed in most places. There are many empty plots around here that people would love to build on, can't be done.
And as I said, rent controls are a disaster; if you want rental prices to drop, you need more landlords to invest more money in rental homes. Lower tax rate on residential rental income would be a good start (23% flat rate now) that's money that tenants pay (indirectly) and owner-occupiers do not.

Ok, so I'm a capitalist...

I think there is a similar problem in UK, not down to too much tourism, but simple lack of local council building of homes for rent.
Tourism should be in the hands of the private sector not State.
The State involvement, if any, in tourism, should be to promote good quality accommodation, respecting local residential areas.
Public housing for those that cannot for whatever reason get a loan to buy, should be in the hands of the State/local Councils, who can then set rents how they want, according to local incomes and costs. Long term project for all I guess.

In the UK in particular, when property prices are rising they always say "there isn't enough property, it's supply and demand". I now see the same being argued in Portugal.

The fact is property prices are overwhelmingly influenced by the supply of money rather than the supply of property. Property prices doubling or tripling in a few years makes no sense in terms of property supply - there has neither been a huge increase in the number of people, nor a mass destruction of houses across the country. What happened is that interest rates were dropped to practically zero. People look at their mortgage in terms of what they can afford to pay each month. When interest rates are so low, that monthly payment allows them to borrow two or three times the total amount they would have been able to with higher IRs. And hence there is two or three times the money supply chasing the same houses, and prices double or triple.

Then as prices rise, speculators see this, and it becomes a pile-on. Those with houses see the value increase, then borrow against it (at crazy low interest rates) to buy "investment" properties. They therefore compete with those first time buyers and young families who are trying to buy a house to live in, and end up outbidding them, then renting those properties to them instead.

Have you ever noticed that when property bubbles do collapse, and prices fall, it is never argued that there is suddenly too much property? No, now it's nothing to do with the supply of property, it's because of a shortage of liquidity, lending constraints, etc. - basically a shortage of money. Governments then embark on ever more absurd schemes to try to keep the bubble inflated - 50, 75 or 100 year mortgages, government lending deposits to those who cannot raise them, encouragement of parents to remortgage and give their children money for deposits etc. Anything other than admitting they've created an asset price bubble and that a return to sensible, normal interest rates will bankrupt millions who over extended themselves on the orgy of cheap borrowing.

Rather than rent controls and other tools that don't work, or bans on foreigners that are simply not allowed, the biggest single thing that can be done is to remove property as being a speculative asset, and return it to being a place for people to buy and live in. There is no shortage of property, at least not if those wanting to buy a place to live do not have to compete against those buying second homes or "investment portfolios". Ramp up taxes (both purchase and annual property taxes) on residential properties that are not primary dwellings. Give those who want to live in a home, and who don't have any other place, an advantage over the spivs who want to buy that house then milk that family for rent because they are unable to buy a house.

If you want rental prices to drop, you don't give landlords a handout and hope they pass it on to their tenants. It doesn't make sense to encourage them to "invest more in rental homes" because all you're doing then is giving them a financial benefit to make it easier for them to outbid a young family who wants to actually buy and live in a house. All you have done is added a property to the rental pool by removing it from the home owner pool. You can reduce rents by taking people OUT of the rental market, not forcing more of them into it, and you do that by making sure people who want to live in houses can afford to do that without having to compete against rich people who've been given incentives to outbid them, then rent the house to them instead.

I say this as a homeowner without any kind of mortage who came to Portugal 10 years ago, bought in cash and has probably tripled or quadrupled my money on paper. The current prices of property are nuts, are not based on fundamentals in any way, and the economy at large would be better if investment was channelled into businesses and commercial investment that improves productivity and creates jobs, not parked in ever inflating asset bubbles. The UK productivity has stalled over the past 10 years or so, because the economic circumstances created a "risk free" and "high return" investment that the government effectively underwrote by intervening to prop up prices, but never did anything to try to cap excessive rises, so who would bother investing in a business and so on, when you could make far more money much more safely by just speculating on property?

The only way to keep rents and house prices from bubbling is to make sure that houses are viewed as a place to live, not a speculative asset or investment. And speculators should not be rescued when the economic winds start to turn, risk goes hand in hand with reward, and a good bath will help put things back where it should be, where property investment is not a one-way bet of huge rewards with zero risk, which is what is needed to avert speculative bubbles for another generation.

I agree with a lot you are saying, but when you don't let investors in, who will build the properties? There are already plenty of empty homes in Portugal, mainly in areas nobody wants to live/where there is no work and the bigger problem is the cost to make these homes liveable. Even if all people see their home as a place to live, you will always have competition with somebody who is willing to pay more and people are focused on desirable locations.

I see it where I live in Ireland and all homes are owned by permanent residents, but it still doesn't reduce prices and rental properties don't even exist.
Councils also make it hard for people wanting to live in smaller homes, for example in our part of Spain tiny homes/mobile homes are no longer allowed and the minimum build is 100m2.

In my area of the Alentejo, the population is 25% of what it was in the 1950s and we are surrounded by abandoned properties and ruins - so probably 40% of our nearest neighbours are estrangeiros, Irish, English, Dutch and German. As it was hardly the "normal" expat territory, I was quite surprised when I first heard English in my local supermarket, but soon learned that there are some quite high concentrations of foreigners in some areas, even though the nearest town remains firmly "Portuguese".

I often ask my Portuguese neighbours if they are concerned at the number of foreigners buying properties - but the answer is always ngative, it's better than having empty houses - and often better than having houses owned by people living in Lisbon and oly coming for weekends, etc. Even the local Camara has grudgingly begun to recognize the need to keep the foreign community onside....

Whether this will change as a result of the huge pressures being brought to bear on Lisbon, etc. remains to be seen....

I'm not sure what is meant by "speculator", except it seems to be a negative term for investor.
How can increasing taxes on a commodity possibly lead to a reduction in price?

I rent out residential properties; I'm not a charity, I demand competitive market rates. I guess I'm competitive, because my tenants usually stay with me until the emigrate or buy their own place.
A happy tenant is a profitable tenant I always say.

As we age and the management gets too difficult for us, we will eventually sell our properties (at a substantial profit). I guess that makes me a speculator.

The question arises; should we reinvest the capital in Portuguese residential rental property that would be close to home and easier to manage?
I'm not interested in tourist rentals, too much bother.

Taxes, regulations, tenants rights... No. We're too old to figure out how to navigate a new minefield.
So we're working to captain flack's criteria and leaving those houses to be bought by Portuguese families. Or foreigners, or Lisbonites, whatever.
But how will that affect the residential local residential rental market?

I don't know of any big investors in rental property out here. The few houses that are rented out as residences are individually owned and held for some reason or other (speculation probably).