An IMGW News Report
Portugal’s housing market remains overheated, with prices climbing steadily and banks warning the situation is edging towards the “unsustainable”. Affordability concerns are most acute in Lisbon and Porto, but the strain is now spreading nationwide.
The problem lies in the mismatch between limited supply and rising demand. João Pedro Oliveira e Costa, chief executive of BPI, told Idealista that while there are efforts to build and renovate homes, “it’s nowhere near enough to meet current needs.” Pedro Castro e Almeida, head of Santander Portugal, described the market as “much worse” than before and warned it is starting to become “unsustainable.”
Bank earnings reports released in August amplified the concern. Paulo Macedo, of state-owned Caixa Geral de Depósitos, highlighted the delays in public housing projects and a construction sector skewed towards the luxury segment, which drives prices higher. Miguel Maya of BCP argued that government guarantee schemes for younger buyers have had a “clearly positive impact,” though he admitted they do little to resolve the structural shortfall in supply.
The government concedes there is no quick fix. Miguel Pinto Luz, the housing minister, recently cautioned that “don’t expect housing prices to change next month, or in two or three months,” though he insists progress is being made. He pointed to the delivery of 10,000 homes this year under the national plan, with a further 8,000 promised by the end of 2025, according to official statements (Portugal.gov and The Portugal News).
Mortgage lending, meanwhile, remains buoyant. Banks continue to extend credit on competitive terms, with defaults at historic lows. For international buyers, that may look attractive. But without a sustained expansion in housing stock, Portugal’s affordability crisis is unlikely to abate—leaving households, and eventually banks, vulnerable to a market pricing out much of the population.
