Housing Rights and Public Policies Association (AHDPP) has explained exactly how the housing crisis is threatening Portugal’s very future.
In an interview with Executive Digest, the association warns of the risk of Portugal becoming increasingly divided between those who own property and those who, despite working, still cannot access housing.
“Delaying moving out of one’s childhood home means delaying starting a family. As we often say, nobody has children at their parents’ house”, says the association – stressing that having a university degree, a stable job, even two salaries in a household no longer guarantees many Portuguese young people the possibility of buying, even renting a home – least of all having children.
Data cited by the association shows that, in 2024, young Portuguese people left their parents’ home, on average, at the age of 28.9, compared with 26.2 years in the European Union, according to Eurostat.
AHDPP cites a study published in the ‘Journal of Public Economics’ that documented a relationship between rising housing prices and declining birth rates among renters.
“In Portugal, the cost of housing also weighs on the decision to emigrate”. Of course, it is “not the work of one government. It is the result of more than a decade of building less than the country needed, and it has spanned administrations of different political colours,” AHDPP readily agrees.
In 2025, 48.844 housing units were approved, but only 30.425 were completed ( this according to data from the National Statistics Institute).
The imbalance is particularly evident when construction is compared with the formation of new families.
“The Bank of Portugal helps explain the origin of the problem: between 2021 and 2024 around 35,000 families were formed per year and around 22,000 homes were completed.”
Estimates of the current housing deficit range between 150,000 and 300,000 – and AHDPP cannot see this improving as it needs to. To eliminate the gap within a decade, it calculates that Portugal would have to build between 45,000 and 65,000 homes per year.
“Building at the pace at which new families are formed only prevents the deficit from growing; it does not reduce it,” the association points out.
“At the current pace, the accumulated deficit will not be closed. These are facts, not opinions, it adds.
Shortage of homes already affecting employment
The housing crisis is no longer just a problem of access to homeownership or renting. According to the AHDPP, it is also making it difficult to recruit and retain workers in several regions.
“In the Algarve, for example, the hoteliers’ association identifies the lack of affordable housing as the main problem in retaining workers in tourism.”
The situation is not limited to the tourism sector.
“The problem extends to metropolitan areas and sectors such as healthcare, education, security forces, construction and industry.”
The association acknowledges, however, that there is still no sufficiently robust national assessment to measure the economic cost of this situation.
“We are not aware, however, of a robust national study that quantifies the economic cost of this situation; it would be useful work for the statistical institutions and the Bank of Portugal. Data is needed, and reliable data.”
Asked what Portugal might look like in five years if there are no structural changes, the association was peremptory.
“If nothing structural changes, the trends point to a country more divided between those who own a home, or inherited one, and those who depend on an expensive and scarce rental market.”
“The responsibility lies with the entire system: the State, for public housing supply and stable rules; municipalities, for land and licensing; banks, for long-term financing of affordable housing; developers, for cost control and the industrialisation of construction.”
AHDPP argues that Portugal needs to stop responding to the crisis with short-term measures. “The biggest mistake, in our view, is another one: we continue to make housing policy through annual packages, when housing requires horizons spanning decades.”
Among proposed solutions is a programme to strengthen municipalities’ technical capacity, with an annual investment of €8.5 million, equivalent to around 175 technical staff, and the use of public land for affordable rental projects.
AHDPP also proposes a model in which municipalities grant land under surface rights, private developers build at controlled costs and long-term investors finance housing with affordable rents for decades. This masterplan was unveiled last month, at a point where the government said the equivalent of ‘thank you, but we don’t need help’. That assessment has changed radically over the past couple of weeks.
“The State does not need to go into debt to build or sell assets: it contributes the land and the rules, and the capital is long-term,” AHDPP insists – stressing the crisis should not be treated as an individual difficulty faced by those looking for a home.
“It is not a problem of individual blame; it is a systemic problem, and that is how it must be solved.”
“The problem belongs to everyone, and so does the solution.”
Source material: Executive Digest