Portugal is going through one of the most serious housing crises in its recent history. What for decades was taken for granted — owning a home — has become, for many Portuguese people, an increasingly difficult mirage to achieve. Prices are skyrocketing, supply is scarce, and solutions are always arriving in dribs and drabs.
The numbers speak for themselves.
The picture is worrying. Lisbon currently registers median rents of €16.00/m², the highest in the country, and in the first quarter of 2025, rents increased in 23 of the 24 municipalities with more than 100,000 inhabitants. Regarding new construction, the data is equally alarming: in 2021, only 19,616 new housing units were completed – 271 fewer than in 2011 and 831 fewer than in 2001. We are literally building eight times less than we did twenty years ago.
At the European level, the situation is no more encouraging. The Eurostat report "Housing in Europe – 2025 Edition" reveals that between 2010 and 2024, production prices in housing construction rose by 561p³t in the European Union and almost 471p³t in Portugal. Investment in housing remained at 4.31p³t of Portuguese GDP in 2024, below the European average.
The voices of those on the ground.
Statements from those who know the market inside out leave no room for doubt.
Miguel Pinto Luz, Minister of Infrastructure and Housing, stated at the Portuguese Real Estate Show (SIL 2024): “We are building very little compared to 20 years ago. We need to rehabilitate and build more.” (Source: Idealista/news, May 2024)
Manuel Castro Almeida, Minister of Economy and Territorial Cohesion, was even more incisive in a parliamentary hearing in October 2025: “Many buildings are having difficulties getting off the ground due to a lack of manpower. My conviction is that there is indeed a shortage of manpower.” (Source: Idealista/news, October 2025)
Bloomberg reported in 2024 that rents in Lisbon rose by 14.51% in a single year, making the capital "inaccessible to many local citizens." An analysis by Público is even more direct, concluding that "the price per square meter in Lisbon averages €2,740, while the construction value set by decree is only €532/m² — a blatant real estate speculation." (Source: Público, August 2024)
What are the causes of the housing crisis?
The crisis does not have a single cause. It is a tangle of several structural problems that feed off each other:
1. Insufficient construction — Decades of underinvestment in new housing have created a supply deficit that current demand cannot meet.
2. Real estate speculation The massive influx of foreign capital and the phenomenon of short-term rentals have diverted properties from the traditional rental market, shrinking supply and driving up prices.
3. High construction costs — Materials and labor have become much more expensive in the last decade, discouraging developers from building in the more affordable price ranges.
4. Bureaucracy and lengthy licensing processes The average time for building permits in Portugal remains one of the longest in Europe, delaying projects for years on end.
5. Ineffective management of public assets. — State-owned land and properties that could be used for affordable housing have been managed inefficiently and with systematic delays.
6. Lack of skilled labor — A problem that we will address in another article, but which is now recognized by the Government itself as one of the direct reasons for the housing shortage.
What is being proposed?
The Government launched the “Build Portugal” strategy, which includes a set of measures, among them:
- Tax reduction on new housing construction;
- Making more rural land available for the development of affordable housing;
- A "moderate income" program with tax benefits for landlords and tenants with rents between €400 and €2,300;
- Creating public-private partnerships for affordable housing;
- The so-called "Green Lane" for hiring foreign workers in the construction industry.
At the European level, the European Commission presented a new emergency housing plan in December 2025, acknowledging that the shortage of public and private housing is "the main root of the problem" across the Union.
What still needs to be done?
The majority of analysts and experts in the sector are unanimous: existing measures fall short of what is needed to solve a structural problem that has existed for decades. Building fewer than 20,000 homes per year in a country that once produced 100,000 means that any solution will take years to have an impact.
What is certain is that housing in Portugal has ceased to be a matter of social policy and has become a central theme of the country's economy and social cohesion. Without access to affordable housing, we lose young people, drive away talent, and deepen inequalities that increasingly mark our daily lives.