Portugal will only be able to use funds available under the European Union’s housing plan if it pushes ahead with “structural reforms” to land policy, licensing and taxation, the Portuguese Association of Real Estate Developers and Investors (APPII) said on Monday.
Without those changes, Portugal risks failing to absorb the available funding and further entrenching its position as “one of Europe’s most imbalanced housing markets”, the association warned in a statement.
APPII described the European housing plan, announced on December 16, as a “historic opportunity” that creates a “unique window of alignment of financing, political pressure and strategic alignment”. It called for faster implementation of measures including a reduced 6% VAT rate for affordable housing and the simplification and standardisation of licensing through single digital platforms, clear deadlines and “tacit approval” when authorities fail to respond on time.
The association also urged long-term housing planning insulated from political cycles, alongside the release of public land for affordable housing developments.
Recognising housing as a “European emergency” means acknowledging that the crisis can primarily be addressed by increasing supply, building faster and reducing costs, APPII said.
“In Portugal, we could and should have moved much earlier,” said APPII chief executive Manuel Maria Gonçalves. “The European diagnosis fully matches what we have argued for years: we need to build more homes, and we need to build them faster.”
The European Commission estimates the EU needs around 650,000 additional homes. Portugal alone faces a shortfall of at least 150,000 homes, highlighting the scale of the challenge, Gonçalves added.
APPII said it was ready to continue working with national authorities on implementing the European plan, including through participation in government working groups and the development of public-private partnerships with central and local government.
According to the European Commission, house prices in Portugal are overvalued by around 25%.
Across the bloc, house prices have risen by an average of up to 60% since 2015, with increases of more than 200% in some member states, while rents have climbed by about 20%. Over the same period, residential building permits have fallen by roughly 22%.
Pressure from short-term rentals has compounded the problem. In some parts of the EU, short-term accommodation now accounts for up to 20% of housing stock, after expanding by more than 90% over the past decade.
Source: Lusa
