The housing crisis affects people and also economic growth. It is driving young people away from urban centres and hindering productivity, warned the director of the European Department of the International Monetary Fund (IMF), in an interview with Lusa.
Alfred Kammer acknowledged that housing difficulties are evident in many European countries, where there have been sharp price increases. This is particularly because, in the last 20 years, "not as many houses have been built as before, nor even as many social housing units."
The Portuguese government "is trying to resolve this specific issue with the program it has in place," he indicated, stressing that what is happening "is really a matter of insufficient supply for the existing demand."
This problem "not only affects people personally, but also the economy, because what we see is that increases in house prices are particularly high in urban centres," which have the highest productivity in a country.
IMF warns about land use and taxation issues
"Productivity depends on attracting talent and the supply of labour, and many, especially young people, are excluded from the market when they try to move to urban centres. And this obviously affects their potential for future earnings, but it also affects economic growth," he explained.
Thus, the housing crisis also harms growth, Kammer warned. Therefore, this calls for a concerted effort to address this issue among European countries, particularly on the supply side, for example, through land use or taxation measures.
House prices in Portugal rose 18.9% in the fourth quarter of 2025 compared to the same period of the previous year, the second-highest increase among European Union (EU) countries, according to the latest Eurostat data.
Data shows that the largest annual increases in house prices in the fourth quarter of 2025 were recorded in Hungary (+21.2%), Portugal (+18.9%) and Croatia (+16.1%).
- In the eurozone as a whole, house prices, measured by the Housing Price Index, increased by 5.1%, while in the 27 EU countries the increase was 5.5%, still in comparison with the same quarter of the previous year.
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