Rate of new build housing well below 2007 says Bank of Portugal

Data from the Bank of Portugal indicates that in 2025, approximately 26,700 new housing units were completed, compared to 25,300 in 2024 and 23,100 in 2023.

These levels are significantly below the 67,500 units completed in 2007 before the international financial crisis.

Building permits have also been increasing, signalling a rise in housing supply within one- to-two years.

In 2025, the number of new housing units licensed reached 41,900—the highest level since 2008—representing an increase compared to the 34,600 units in 2024 and the average of 31,600 for the period 2021–2023.

However, the Bank of Portugal points out that “this number will still be insufficient by itself to compensate for the deficit in new construction compared to the accumulated demand of the last decade due to demographic pressure and other factors.”

“We always warned about this, but nobody ever listened to us. But now it is proven that the sector was right. But more is needed. We need more instruments and conditions so that instead of building 30,000 homes per year, we can build 60,000 or more,” says the CEO of Portugal’s Developers and Investors Association (APPII).  Manuel Maria Gonçalves.

The CEO says licencing processes need to be accelerated so that they can keep pace with the willingness of developers and investors to invest.
On the other hand, he considers that modular construction “will be fundamental to maintaining a faster pace of construction, because it allows for a type of workforce that traditional construction does not have”.

Lack of Social Housing

Another major problem highlighted by the APPII boss concerns the lack of social housing.

The Bank of Portugal report emphasises that in Portugal supply is low, both in absolute terms and by way of international comparison, being mainly developed by public entities, especially at a local level, with the highest ratios in the Porto Metropolitan Area, Madeira, some islands of the Azores, the districts of Portalegre and Évora, as well as some municipalities in the Lisbon Metropolitan Area.

“This is a topic that nobody questions, because they are afraid to hear the answer. First, we have to start defining what social housing is and what housing for the middle class is”.

This was in a country where two million people earned up to €1,000 monthly and where between 2019 and 2025 there was a 93% increase in the average price of houses while the average net income only increased by 43%.

It was the only country where this was the case in the European Union. In the rest of the European Union, the average net income was higher than the increase in house prices,” warns Manuel Maria Gonçalves.

Furthermore, the CEO emphasises that in the last ten years the real estate sector paid around €60Bn in taxes, but that during that period the State did not build public housing.

“Our public housing stock stands at 2%. It’s one of the lowest in the European Union.

The private sector is available to help and has this social responsibility, but what we really want is public housing.

We are available to build and to form public-private partnerships, but that’s not our role. We are not the State. The State has failed. If it wasn’t for the real estate developers, the situation would be irreversible. We build what can be built,” he says.

Manuel Maria Gonçalves also laments that real estate developers and investors “have the thankless task” of explaining to people why this is a “very serious, unprecedented national emergency.”

“There’s a housing crisis in the European Union, but for us it’s even worse. Our crisis is much older.

The issue is that when there was no inflation and prices and wage income more or less kept pace with the increase in housing prices, it was possible to sweep the problem under the carpet. Now we can’t do that,” he concludes.

Source: Jornal Económico