Portugal Unveils Major Industrial Construction Push and €1.34 Billion Financing to Tackle Housing Shortage
Key figures from Portugal’s government and private sector have convened in Lisbon to address the nation's escalating housing crisis, signaling a strategic pivot towards industrialized construction and unveiling a substantial financing package aimed at boosting the affordable rental market. The 'Connect to Build' conference, hosted by the influential Casais Group at the Belém Cultural Center, served as the platform for major announcements that could reshape property development across the country.
António Carlos Rodrigues, CEO of the Casais Group, one of Portugal's largest construction firms, detailed the urgent need for a paradigm shift in the industry. Citing a dramatic fall in housing construction from an average of 110,000 units per year in the 1990s to just 16,000 annually in the last decade, Rodrigues positioned industrialization as a critical response. “The artisanal model, built brick by brick on-site, no longer meets current urgencies,” he stated. The strategy involves moving significant parts of the building process to off-site factories, where modules and structural components are produced in a controlled environment before being assembled on-site. This method, he argued, enhances efficiency, ensures higher quality, and combats the severe shortage of specialized labor.
A central development from the event was the formalization of a partnership between the Casais Group and IKEA Portugal. Leandro Teixeira, CFO of IKEA Portugal, joined Rodrigues to sign a protocol that will see the two companies collaborate on delivering fully furnished, affordable homes. This initiative will leverage Casais' off-site manufacturing capabilities to build the structures, which IKEA will then equip with its functional and price-controlled home solutions. “This partnership unites two complementary companies in the search for solutions capable of serving the middle and lower-middle class without sacrificing quality or aesthetics,” a joint statement noted. The model has already been tested in the development of university residences.
The conference also addressed the significant legal and administrative hurdles that developers face. Patrícia Viana, a leading lawyer and partner at Abreu Advogados, described the current legislative landscape as “bureaucratic, confusing, and volatile,” which she identified as a primary source of “instability, additional costs, and loss of time for investors.” The sentiment was echoed by other panelists, who called for a more stable and streamlined regulatory environment to encourage investment and speed up project delivery timelines.
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Perhaps the most impactful announcement came from Gonçalo Regalado, an administrator of the Banco Português de Fomento (BPF), the national promotional bank. Regalado revealed that the BPF is launching five new financial instruments to support housing by the end of the year. The flagship initiative is a €1.34 billion credit line, established in partnership with the European Investment Bank (EIB), dedicated to the construction of 12,000 affordable rental homes. The program will offer 25-year financing terms and public guarantees to mitigate risk for developers and municipalities. “We want to give peace of mind to municipal councils, so they can move forward without fear of budgetary imbalances,” Regalado explained, positioning the fund as a key tool to scale up public-private partnerships.
The government's perspective was provided by the Secretary of State for Housing, Patrícia Gonçalves Costa, who confirmed that a comprehensive strategy is underway. She acknowledged the dramatic 88% decline in public housing construction between 2001 and 2021 and stated, “There is no silver bullet. Only by working on all fronts – legislation, financing, innovation, and urbanism – can we respond to the crisis.” Costa confirmed that a revision of the core legal framework for construction, the RJUE (Regime Jurídico da Urbanização e Edificação), is in progress, alongside a push to mandate digital technologies like BIM (Building Information Modelling) to reduce errors and shorten approval times.
Architect Miguel Saraiva, founder of Saraiva+Associados, also spoke, endorsing the sustainability benefits of modular construction. “If a modular building can be built like a Lego, it can also be dismantled like a Lego, respecting a circular logic,” he remarked, highlighting the environmental advantages of the new methods. The collective message from the event was one of urgent, coordinated action, with industrialization and targeted financing at the forefront of Portugal's strategy to deliver a new generation of housing.
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