Market dynamics trump controversy

The recent media attention on the resale of properties acquired from public entities, particularly in the context of social housing, for values significantly higher than the original purchase, has generated a certain amount of public controversy.

It's easy, not to say "popular," to focus on the apparent profits, but to truly understand this situation, it's essential to go beyond what's on the surface and analyze the various factors that shape it, especially the legality of the process and the dynamics of the real estate market. That, yes, would be much more relevant news.

The way certain news items are framed can sometimes leave the feeling that they have a purpose beyond mere information.

To provide context, it's important to remember how these sales work. Public entities, such as the State, city councils, or urban development entities like the former EPUL in Lisbon, among other consortia, sell properties as part of broader public housing policies. These policies aim not only to support access to housing for underserved populations but also, in other contexts, as was the case with EPUL, to attract and retain residents in urban areas (such as young people and the middle class).

In many cases, sales may be directed to tenants already residing in the properties (usually owned by the city council), but they also occur to other citizens who meet the specific criteria of each "program." In all cases, these transactions are usually accompanied by clear contractual clauses, including a non-transfer clause. This prevents the new owners from selling or renting the property for a specified period (often 3–5 years).

The purpose is clear: to prevent the property from becoming the object of immediate speculation and to ensure that it serves its original function as the buyer's own permanent home during this initial period.

The current controversy arises precisely because many of these terms have expired, giving the owner complete freedom to dispose of their property. This means they can sell it, rent it, or use it as they see fit, just like any other owner in the open market.

The crux of the matter does not lie in any illegality or immorality on the part of the owners, but rather in the current circumstances of the real estate market.

In recent years, Portugal, particularly its major cities, has seen unprecedented real estate appreciation. Factors such as growing demand, foreign investment, supply shortages, and even tourism have contributed to the price hike, which is occurring not only nationally but also in many other European and global cities.

A property purchased a decade ago for, say, €100,000 could be worth €300,000 or more today. This appreciation is a natural consequence of market dynamics and not due to any illicit or immoral action. The citizens who purchased these homes are, therefore, acting within their rights and trying to get the best possible deal for their assets, something common to any owner transacting a property.

Interestingly, this same market dynamic that benefits private property owners also affects local authorities. Examples include situations in which, after offering properties to tenants over a decade ago, state and/or municipal entities are now seeking much higher sale prices, mirroring the market's expected appreciation. In this cycle of real estate transactions, it seems that everyone benefits considerably from the current market conditions.

The real discussion, instead of focusing on someone else's supposed "smartness" or immorality, should focus on the alienating entity, that is, the State and local authorities.

It is solely up to those who decide to sell public assets to establish the rules and conditions for such sale, in particular by imposing longer non-sale periods.

The news that focuses solely on the apparent profits of the owners, without delving into the legality of the process and the market conditions that facilitate it, offers an incomplete and, consequently, potentially distorted view of reality.

The increase in sales prices is only a reflection of the real estate market in general.

The legitimate owners are limited to enjoying the right of ownership that was conferred upon them after fulfilling all contractual conditions.

In an age of instant information, questioning the framing and purposes underlying certain journalistic narratives is an elementary civic exercise.