A study by João Amador finds that a 1% rise in demand lifts house prices by about 0.69% and rents by about 0.37%, with the effect strongest in Lisbon and Porto.
Vítor Reis says the crisis could deepen without more construction, noting that building a home takes three to five years.
Applying the caps in Portaria 454/2026/1, in force since 13 October, to a model project of 202 homes at 1,500 € per square metre, the column's author found the accounts close comfortably in Lisbon, Porto and six other areas.
ANMP president Pedro Pimpão said on 21 October that municipalities are ready to help the state, and that they already account for 40% of national public investment in health, education and housing.
A study by João Amador, published in the Revista de Estudos Económicos, concludes that Portugal's housing crisis cannot be solved with demand-side policies. A 1% rise in demand lifts house prices by about 0.69% and rents by about 0.37%, and the effect is much larger where supply cannot respond, with Lisbon and Porto singled out. Construction has stayed subdued even though prices and rents have climbed sharply since 2022. The column behind this argument concludes that the shortage is one of homes, not of buyers or tenants.
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The column proposes that municipalities grant land under a long-term surface right, letting a private investor design, finance, build and maintain housing. The municipality then leases the homes from the investor and sub-leases them to families at affordable rents. The municipality takes on no loans and pays no construction costs, and the buildings return to municipal property when the term ends. According to the column, the Tribunal de Contas has held that such a contract is not subject to prior visa. Portaria n.º 454/2026/1, in force since 13 October, caps rents under the new Simplified Affordable Rental Regime at 80% of the INE median rent. Applying those caps to a model project of 202 homes at 1,500 € per square metre, with a 3% maintenance reserve deducted from revenue, the column's author found the accounts close comfortably in Lisbon, Porto, both metropolitan areas, the Algarve, Madeira, Coimbra and Aveiro.
Vítor Reis, former president of the Instituto da Habitação e da Reabilitação Urbana (IHRU), told SIC Notícias's Jornal do Dia that the crisis could worsen without more construction. He argued that the state alone cannot solve the problem and that private investor confidence must be restored. He called the new rent law the only real opportunity to bring private investment back into housing, warning that otherwise Portugal risks producing mainly luxury housing.
“The problem is not new. Every year that passes, things get worse.”
Reis said building takes time, with three to five years needed to find land, prepare projects, launch tenders and finish works. He cited labour shortages, rising material costs and demographic change, including population growth driven by immigration. He also criticised past promises, saying several public programmes fell well short of their announced targets.
“A house cannot be made with a snap of the fingers.”
Speaking to Lusa on 21 October after a meeting of its executive board in Mourão, in the Évora district, the National Association of Portuguese Municipalities (ANMP) said municipalities are ready to help the state expand public housing. Its president, Pedro Pimpão, said municipalities are working with the IHRU and regional development commissions to reprogramme Portugal 2030 priorities and speed up procedures. He pointed to a reinforcement of housing funds in the proposed 2027 State Budget and backed funds reserved for housing, including controlled-price housing. Pimpão said municipalities already account for 40% of national public investment in health, education and housing.
“All changes that come in the direction of reducing bureaucracy and simplifying the process are welcome.”
Construction firms, developers, modular-construction specialists and cooperatives told Expresso on 21 October that cheaper homes can be built now. The private and cooperative sector says it has the technical means and the willingness to respond to the housing emergency. It asks the state and municipalities for land and, above all, less bureaucracy.
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Municipalities say they are ready to help the state boost public housing, while a former housing institute chief warns the crisis could deepen without private investment.
AI text based on reports by Jornal Expresso, SIC Notícias and Notícias ao Minuto. Published .