Lisbon, April 17, 2026 (Lusa) - The housing crisis affects individuals and economic growth by pushing young people away from urban centres and slowing productivity, the International Monetary Fund (IMF) European Department director, Alfred Kammer, said on Friday in an interview with Lusa.
He acknowledged housing difficulties exist in many European countries with sharp price rises, mainly because builders “constructed fewer houses, including social housing” (subsidised housing for people with low incomes), over the last 20 years.
Portugal's government "is trying to solve this specific issue with the programme in place," he said, noting that "it is really a matter of insufficient supply for existing demand."
This problem "affects people personally and affects the economy because house price increases are particularly high in urban centres", which have the highest productive capacity in a country.
"Productivity depends on getting talent and labour supply and many, especially the young, are excluded from the market when trying to move to urban centres. This obviously affects their future earnings potential and the economy's growth," he said.
Thus, the housing crisis also negatively impacts growth, Kammer warned.
He called for a concerted effort to deal with this issue, particularly regarding supply, among European countries through land use planning (managing how land is developed and used) or taxation.
House prices rose 18.9% in Portugal in the fourth quarter of 2025 compared to the same period in 2024, the second-highest rise among European Union (EU) countries, according to recent Eurostat (the EU's official statistical office) data.
Hungary (+21.2%), Portugal (+18.9%) and Croatia (+16.1%) recorded the largest annual house price increases in the fourth quarter of 2025. House prices increased 5.1% in the eurozone, measured by the House Price Index (a tool tracking residential property market changes), while the rise was 5.5% in the 27 EU countries compared with the same quarter in 2024.
MES/LYT // AYLS
Lusa
