Portuguese Government launches new housing policy to tackle rising prices

Portugal’s Prime Minister has announced a fresh housing strategy aimed at bringing together all key players in the property sector to help resolve the country’s housing crisis and curb price increases.

The new government led by Luís Montenegro is prioritising one clear goal: “Ensuring quality housing for everyone.” As part of its new mandate, the government has introduced a comprehensive housing policy designed to mobilise both public and private sectors to help stabilise the housing market and address affordability challenges.

This policy comes in response to the ongoing housing crisis in Portugal, marked by house prices rising significantly faster than wages. The initiative draws inspiration from the Construir Portugal framework presented in 2024 and has been incorporated into the current Government Programme.

According to an official statement on the Government’s website, the strategy will focus on “a decisive increase in supply — public, private, and cooperative — simplifying licensing procedures and restoring confidence in the rental market.”

The approach is designed to be fully integrated, involving national and local government, cooperatives, and private developers. The goal is to boost construction and urban regeneration across Portugal, ease access to housing, and slow the rapid rise in property prices. In early 2025 alone, property prices rose by 16.3% — the highest annual increase on record.

For foreigners living in Portugal or considering a move here, these developments could bring greater stability to the housing market, increased availability of rental options, and potential investment opportunities in urban regeneration projects.

Key measures to address the housing crisis in Portugal

To make this vision a reality, the government has outlined a series of concrete measures designed to bring together all sectors of the property market:

• Construction, rehabilitation and acquisition of 59,000 homes;
• Public-private and cooperative partnerships to redevelop vacant state-owned buildings;
• A new temporary framework to fast-track private and cooperative housing projects, with reduced taxes and fees;
• Designated priority zones for urban expansion, supported by urban renewal bodies and fast-track infrastructure development (as proposed in the Parque Cidades do Tejo initiative);
• A comprehensive overhaul of the urban planning and licensing system, making it simpler and more efficient;
• A revamped rental policy to restore confidence, attract investment, and ensure legal security for both landlords and tenants;
• Increased provision of affordable housing, with financing options and incentives for the build-to-rent model;
• Redevelopment of underused or vacant public buildings to swiftly expand housing supply;
• Transfer of scattered public properties to local authorities for renovation and rental projects;
• Modernisation of the construction sector, with a focus on innovation, industrialisation, and technology (including Building Information Modelling – BIM);
• A review of public rent support schemes to ensure quicker assistance for those in greatest need.

With these measures, the Government aims to offer housing solutions for all generations — young people, families, and the elderly — across Portugal’s cities and rural areas.

For expats and newcomers, the evolving housing landscape may bring new opportunities, particularly in areas undergoing regeneration or where rental supply is set to grow. While affordability remains a concern, these reforms aim to make finding a home in Portugal more accessible and secure for all.