Other factors that cannot be ignored

In this chapter

• Short-term rentals are concentrated in the historic centres; there were about 125,000 registrations in 2025, more than 40,000 of them inactive.
• Public housing is about 2% of the stock, among the lowest in Europe.
• Recent support for home buying adds demand to a market without supply.
• Even without immigration, smaller households need more homes for the same population.

Tourism and short-term rentals

There were about 125,000 short-term rental (alojamento local) registrations in 2025, more than 40,000 of them inactive and due to be removed. Lisbon had 18,600 and Porto 10,6001. The impact is concentrated in the historic centres, where short-term rentals took homes away from long-term renting.

The Costa government’s Mais Habitação programme halted new registrations in 2023. The Montenegro government returned the decision to the municipalities with Decree-Law 76/2024, in force since November 2024, which lifted the general suspension2. The effect on the number of registrations has not yet been measured (log item V11).

There is almost no public housing

Public housing is about 2% of the stock, one of the lowest levels in Europe, the result of under-investment by successive governments3. Without a significant public stock, the state has no way to cushion demand shocks. Public bodies completed 401 new homes in 2011, 10 in 2024 and 53 in 20254.

New homes completed by public bodies

Dwellings in new residential buildings · number · 2011–2025

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The 2018 New Generation of Housing Policies set the target of raising public housing from 2% to 5% of the stock. Its main programme, 1.º Direito, had 18,778 homes completed by the end of 2025, about 85% of them renovated, and only 2,401 handed over to families5.

Demand-side policies

The Montenegro government exempted young people up to 35 from IMT and stamp duty, for purchases from August 20246, and created a public guarantee for young people’s mortgages. The guarantee started with a ceiling of €1.2bn and was increased to €2.3bn, for contracts until the end of 20267.

The IMF recommended withdrawing the guarantee because it adds demand8, and the Banco de Portugal concludes that the crisis cannot be solved with demand-side policies9. This is the strongest criticism that can be made of the current government, and it does not depend on what earlier governments left behind. Author's analysis

Interest rates, credit and smaller households

Near-zero interest rates in 2015–2021 fed the rise in values; the increase in rates in 2022–2023 only slowed it briefly. The IMF considers that credit was not the main driver, but mortgage lending has grown faster than in the euro area since 2023, and the war with Iran has revived the prospect of rate rises in 2026.

Average household size fell from 2.6 people in 2011 to 2.5 in 2021, and about one million people live alone10. Even without immigration, Portugal would need more homes for the same population.

Renting and homes off the market

The 2012 revision of the rental law, under the Passos Coelho government, liberalised rents; the 2019 and 2023 changes, under the Costa government, strengthened tenant protection and limited rent increases. Landlords and developers cite the constant changes in rules as a reason for taking homes off the market. Evidence on the effect on the number of contracts has yet to be gathered (log item V12).

The 2021 Census counted 723,215 vacant dwellings and 1,104,881 for seasonal or secondary use11. Only some of the vacant homes are in good condition and in areas where there is demand: many are in the interior, run-down or tied up in inheritances. How many are in good condition in the metropolitan areas is a question still without an answer (log item V13).