Maria Augusta is 85 years old and has lived in Lisbon almost her whole life. Recently, a company bought her building to transform it into short-term rentals and now she has been living in fear of eviction (Vidal, 2019). Maria is not alone in her struggle to keep her home. In 2017, an average of nearly six families a day were evicted out of Lisbon’s urban center due to rising costs. At the same time, the declining number of local residents are outnumbered by tourists at a 1 to 8 ratio

Tourism is not the only thing responsible for the 30% housing price increase in Lisbon in the last two years (Minder, 2018). In an attempt to recover from the 2010 financial crisis and the following budgetary crisis, in 2011, Portugal implemented a series of economic reforms such as liberalisation of the housing and rental markets, and a new non-residence tax scheme that benefits international investors.

In 2012, the Golden Visa programme, an investment migration program that offers applicants residency in exchange for investments over €500,000, was implemented to globalise and diversify Portugal’s economy. The programme especially encourages investor-migrants to buy property for redevelopment purposes in designated urban neighbourhoods of Lisbon and Porto. Unlike traditional investment migration programmes in the US or Canada, Portugal’s Golden Visa programme only requires applicants and their family members to be in the country for an average of 7 days a year to renew their temporary residency. Not only do they enjoy free movement into other EU countries, after five years, they can also apply for permanent residence.

As a result, Lisbon’s once derelict and abandoned urban centre has been transformed into a tourist and real estate investment hotspot. In 2011, 50,298 out of 322,865 housing units in Lisbon were left vacant with little to no maintenance (Minder, 2018). Eight years later, Lisbon hosts 4.5 million tourists annually, and despite the dramatic increase in housing prices, there were still more than 20,000 properties, 85% of which are entire apartments, offered on Airbnb for short-term rentals (Yeung, 2019).  Aside from physically upgrading and populating the urban centre of Lisbon, the Golden Visa programme also brings in billions of foreign investment that make up 13% of Portugal’s GDP in 2014 (Xu et al., 2015). The direct cash inflow came at a timely need to one of the hardest-hit countries in the 2008 financial crisis.

Alfama, Portugal. Photo by Alistair MacRobert on Unsplash
Lisbon, Portugal. Photo by Vita Marija Murenaite on Unsplash

However, whether or not the Golden Visa will truly bring long and sustainable economic growth to Portugal’s economy is still uncertain. Even though the program was originally designed to bring entrepreneurial skills of investor-migrants to Portugal to revitalize the economy, 95% of the applications are made under real estate investment (Li and van der Barren 2018). That means, the majority of the investment actually ends up in the domestic real estate market, benefiting very few political and business elites. Moreover, applicants are unlikely to contribute in other sectors of the economy since they still choose to reside in their home countries and just come to Portugal for an average of one week per year to fulfil the bare minimum residence requirements. 

In fact, opening up Portugal’s real estate market to international buyers have adverse macroeconomic risks that are especially dangerous to a small state economy like Portugal (Xu et al. 2015). Some of the risks are inflation, loss of competitiveness, and crowding out of other private sector activities. The country’s economy could also be subjected to volatile buyer behavior and a sudden-stop risk — the investor-migrants can pull out of the market as soon as they gain permanent residency in five years. Last but not least, unregulated property prices will most likely keep skyrocketing because domestic buyers lack purchasing power under years of austerity policies.  Especially when real estate prices are still somewhat affordable compared to other global cities such as Beijing or London. For example, an average property in Lisbon costs €3500 per square metre while the average monthly salary is €850 (Minder, 2018).  In contrast, a property in central Beijing costs easily €5000 per square metre (Almeida, 2019).

While the macroeconomic risks remain theoretical at the moment, the substantial threat programs like the Golden Visa pose to the access of housing and livelihoods of local Portuguese residents like Maria is tangible and visible.  In 2016, almost 2000 families were evicted from their homes in Lisbon. The booming tourist and property economy also fractured the neighborhoods into residents who participate in it and those who don’t. New and overpriced shops and restaurants that feed into Lisbon’s Disney-like image make neighborhoods barely recognisable for the remaining residents, unleashing a classic case of gentrification and touristification in process (Minder, 2018). 

It is not a surprise that Chinese investors and their families make up 60% of the Golden Visa applications (Li and Van der Barren, 2018). Since the 1980s, wealthy Chinese families have long been using investment migration as the two birds in one stone approach to diversify their wealth and increase international mobility (Szto, 2014).  These programmes have become even more popular after President Xi Jin Ping gained power in 2013 and launched a nation-wide anti-corruption campaign. Aside from political stability, another compelling reason for the wealthy Chinese to migrate abroad is for a better multilingual education for their children. What makes Portugal’s golden visa programme so attractive is because it offers real estate as an investment option and has low residence requirements that enable them to be absentee landlords.

However, the story is not as simple as Chinese investor-migrants like to become global gentrifiers. The disproportionate amount of investment into the real estate sector is in no way a sole consequence of foreign demand. Instead, there is a larger migration and property investment framework to make sure that an investor migrant invests in real estate and not in other sectors. 

On the Portuguese side, real estate investors and international intermediaries work closely with the government to design, implement, and market the real estate-based migration scheme to international buyers (Li and van der Barren, 2018). In 2014 and 2015, the Golden Visa programme almost came to a halt due to a fraud case between government officials overseeing the program and private companies that recruited Chinese buyers into an illegal fast-track application process for more money. In China, Chinese migration intermediaries market real estate as the only investment option to draw in the initial client base. They then connect clients with local real estate agents in Portugal to select and pay for a property virtually without even needing to step foot onto Portugal soil. 

In 2015, the deputy Prime Minister of Portugal, Paulo Portas addressed the investor-migrants: “if you help us, we will treat you well.” Once the well-intended message to attract foreign investment is now seen with a degree of irony. Some investor-migrants are “treated too well” by bribing their way into a fast-tracked migration process. Once passed the lengthy and costly process, most regular applicants are “treated well enough” to enjoy the best of both worlds of  living in their home country and still having access to the property market and residency permit of Portugal.  On the flip side of the coin, Portugal’s own economically disadvantaged local citizens who might not “help” by participating in the new property-directed tourist economy are being forced out of their homes. 

Fortunately, local activists groups have been tirelessly organising anti-gentrification protests and finally, in 2018, a Basic Housing Law was passed that sets the legal groundwork to treat housing as a citizen’s social right, allowing individuals or neighbourhoods as a whole to file complaints about ongoing developments. The Portuguese is not alone in its fight for the right to the city. Many other cities such as London, Hong Kong, New York, have long suffered through the same over-financialisation of the real estate market. Activists demand a reprioritisation of the use-value over the exchange value of housing through movements such as the Occupy movements and London riots (Harvey, 2013). 

Only in this globalised age would the destinies of local Portuguese people like Maria be connected to the destinies of upper-middle-class Chinese investor-migrants on the other side of the planet. Policymakers who wish to adapt and further integrate into global neoliberal capitalism also need to be fully aware of its dispossessing dark forces. As the new housing law goes into effect in the coming years, the world shall see if the Portuguese government is truly ready to put its citizen’s social rights above short-term economic gains from foreign investors and tourists. At least there is hope now.


Almeida, H. (2019, September 19). Portugal Is Europe’s Hottest Property Market—And That’s Hurting Locals. Available at:

Harvey, D. (2013). Rebel Cities: From the Right to the City to the Urban Revolution (2 edition). Verso Books.

Li, H., & van der Baaren, L. (2018). Wealth Influx, Wealth Exodus: Investment Migration from China to Portugal – IMC-RP 2018/1. Available at:

Minder, R. (2010, May 13). Like Spain, Portugal Hopes to Make Cuts, but It Is Mired in Structural Weakness. The New York Times. Available at:

Minder, R. (2018, May 23). Lisbon Is Thriving. But at What Price for Those Who Live There? The New York Times. Available at:

Szto, M. (2014). Representing Chinese Real Estate Investors in the United States. Minnesota Journal of International Law 23(2): 173-211.

Vidal, M. (2019, April). Portugal: Tourists, Tourists Everywhere. New Internationalist, NI 518. Available at:

Xu, X.,, El-Ashram, A.,, Gold, J., & (2015). Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizenship Programs. IMF Working Papers, 15/93.

Yeung, P. (2019). Can a New Housing Law Curb Gentrification in Lisbon? CityLab.

About the author

Joy Li has recently completed her MSc in Urbanisation and Development at the LSE. She previously studied in the US and Germany for her bachelor degrees in Sociology and German Studies. Her research interests include gentrification, urban redevelopment, migration, gender, civil society, and transnationalism.