Portugal’s bid to attract foreign money backfires as rental market goes ‘crazy’

Lisbon’s scenic views attract hordes of tourists, who take advantage of Airbnb accommodation and other short-term rentals. Photograph: Gonçalo Fonseca/The Observer

By 7.30 on a summer night, Lisbon’s steep, beautiful streets are beginning to fill with visitors taking selfies in the soft light, trailing from bar to bar and wrestling with the nightly conundrum of where to have dinner.

Margarida Custódio, who sits at home with her three-year-old daughter, Pilar, has more pressing matters on her mind. Like so many people in Portugal, where rental prices make a mockery of the low salaries, Custódio lives through a monthly agony when it comes to covering the costs of her flat. Despite a good job in human resources, she earns €930 (£795) a month after tax – of which €700 goes on rent.