Lisbon, Oct. 21, 2025 (Lusa) - Portugal needs 150,000 to 200,000 homes, but the construction sector's capacity "is at its limit," warned several property developers gathered on Tuesday morning at a conference to analyse the government's housing measures.
This year, the sector's agents estimate that 28,000 new homes will be completed nationwide.
"Twenty years ago, 100,000 houses were built every year. Today, an average of 24,000 to 25,000 new homes are being built, with this year reaching a peak of 28,000. Prices can only be reduced with more supply, but there is no capacity to do more," said Manuel Maria Gonçalves, CEO of the Portuguese Association of Property Developers and Investors (APPII), during a conference on the government's housing package organised by Diário Imobiliário.
The main factors aggravating the housing crisis are the labour shortage, estimated at between 80,000 and 100,000 workers, the "excessive" taxation on builders and clients, which accounts for up to 40% of the total cost of developments, the slow pace of licensing, and the launch of one-off stimulus measures lasting the duration of a parliamentary term.
For most speakers, the measures announced by the government in September are "ambitious" but "not very feasible".
The sector's long-demanded VAT reduction to 6% "is welcome"but, as João Sousa, CEO of the JPS Group, emphasised, "it may only affect new constructions that will be launched in a year and a half or two years."
He added that this and other measures designed to incentivise the supply of housing "last for the duration of the political cycle", creating enormous instability for investors.
"It's a brave measure, but it should go beyond 2030," he concluded.
Madalena Azeredo Perdigão, a partner at CCA Law Firm, pointed out that the new reduced VAT rate, for housing worth less than €648,000, still has to be authorised by the European Commission, after passing through parliament, which could further delay its entry into force.
The government's new package "doesn't have shock measures, as we needed, because it's not for immediate implementation," said José Rui Menezes e Castro, CEO of MAP Group.
"A shock policy would create the conditions to make the existing housing stock available on the market," he said.
Developers have questioned the government's announcement that thousands of new homes will be constructed using funds from the Recovery and Resilience Plan (RRP) and the European Investment Bank (EIB).
"The numbers are growing daily to make an impact, but there is no capacity to build what has been announced. Each municipality works with the PRR as if it were a micro-enterprise. There's no global structure that fits everything together at a central level," said João Sousa.
Nuno Malheiro, an architect, said that neither the municipalities nor the Institute for Housing and Urban Rehabilitation (IHRU) can take advantage of the funds available, namely those from the RRP, which end in 2026.
The government also announced the simplification of licensing. The speakers illustrated their experience with local councils with concrete situations, emphasising that reducing response times is not enough.
"The same law is interpreted in different ways by local councils, not to mention the regulations, with their own rules. This makes it difficult and creates insecurity," said Nuno Malheiro, for whom "simplifying means standardising the rules" in all the municipalities.
The government's housing package, announced in September as a “shock policy” to “shake up the construction and rental market” in the country, includes a reduction in VAT on construction to 6% on sales of up to €648,000 and rents of up to €2,300, tax deductions on rents of up to €900, a reduction in the income tax rate from 25% to 10% on “moderate” rents of up to €2,300, simplification of licensing and an increase in IMT for non-residents.
CT/ADB // ADB.
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