The governor of the Bank of Portugal has called for a national consensus on tackling the country’s housing crisis, arguing that building more homes, expanding social housing and reducing bureaucracy are essential to easing pressure on the market.
Speaking at a seminar organised jointly by the Bank of Portugal (BdP) and the Bank of Spain in Lisbon on Thursday (October 22), Álvaro Santos Pereira said the central bank had repeatedly stressed that solutions must focus on increasing housing supply.
“We have been reiterating for quite some time that solutions must come from the supply side – building more,” he said, according to Lusa news agency.
Santos Pereira also highlighted Portugal’s shortage of social housing, noting that the country remains well below the OECD average in this area.
He argued that increasing public housing provision must form part of a broader strategy to address the crisis, alongside measures to encourage private construction.
However, he acknowledged that the construction sector faces significant obstacles, including difficulties attracting workers and lengthy planning procedures.
The governor called for faster planning approvals and less bureaucracy to allow new homes to reach the market more quickly.
His Spanish counterpart, José Luis Escrivá, who also participated in the discussion, pointed out that the construction industry had been severely weakened by the previous financial crisis and had struggled to recover sufficiently to meet growing housing demand.
Santos Pereira warned that housing shortages cannot be resolved overnight, citing countries such as Canada, Australia and Sweden, where similar imbalances have taken considerable time to address.
“What is important is that we collectively recognise what is happening and try to reach the broadest possible agreement and consensus to provide solutions to the problem,” he said.
He urged the government, private sector, local authorities and universities to work together to accelerate progress.
Economy minister also highlights construction shortage
The governor’s comments echo those made earlier this month by Economy and Territorial Cohesion Minister Manuel Castro Almeida, who blamed Portugal’s housing shortage largely on a sharp decline in private construction.
As previously reported by The Resident, Castro Almeida warned that Portugal now builds as many homes in a month as it did in a week 20 years ago.
The minister argued that public housing alone would not resolve the crisis and urged local authorities to speed up planning approvals and identify suitable land for development.
He also revealed that around 40,000 new or renovated homes were expected to become available by the end of 2026, still well short of the 133,000 homes identified as necessary by municipalities.
Although both officials agree on the urgent need to increase construction, Santos Pereira placed greater emphasis on expanding social housing, while Castro Almeida highlighted the importance of reviving private development.
Their comments add to growing calls for structural changes to Portugal’s housing market, with both identifying insufficient construction and administrative delays as major obstacles to resolving the crisis.