Person holding a key and a sign in shape of a house

The real estate market is still buzzing, with prices not slowing down much. The shortage of supply, together with rising interest rates, is increasing the pressure on the Portuguese.

In Portugal, the government has implemented a series of measures to support housing, under the Mais Habitação (More Housing) program, to circumvent this perfect storm in the real estate sector.

However, there are other examples that, although they seem fantastic for the wallet, can have a “perverse” effect, such as the case reported by the German newspaper Handelsblatt, which reports that the German state, through the employment centers, is granting housing subsidies that are overpriced compared to the market average.

For example, if you live in Munich, you are entitled to a housing allowance of 19.20 euros per square meter. In other words, if you live in a house of 100 square meters, you get 1,920 euros.

Sounds interesting, yes, but this figure is higher than the average rent in the city of Munich, which is 12.80 euros.

In this scenario, landlords are riding the wave of the German government and raising rents, which is creating a negative spiral in the country’s housing sector.

In other words, according to the Pestel Institute in Hannover, this subsidy to citizens is therefore “more likely to support landlords”.

The study also reveals that, at a national level, this measure results in an “undue payment” of around 700 million euros per year.

According to the same document, in total, housing costs in this form are expected to have exceeded 20 billion euros last year.

On the other hand, spending on social housing by the federal and state governments in recent years has been less than four billion euros a year.

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