Developers Warn of 200,000 Housing Deficit as Construction Sector Hits Limit
At a conference in Lisbon, prominent real estate developers have issued a stark alert: Portugal faces a housing shortfall of 150,000 to 200,000 units while the construction sector's capacity to build is already “at its limit.” The event, organized by Diário Imobiliário and hosted at CCA Law Firm, focused on analyzing the government's State Budget measures for housing.
During the discussion, industry leaders highlighted a severe bottleneck in housing production. Manuel Maria Gonçalves, CEO of the Portuguese Association of Real Estate Developers and Investors (APPII), noted a dramatic decline in output over the past two decades. “Há 20 anos, construíam-se 100 mil casas por ano. Hoje, constrói-se, em média 24 a 25 mil novas habitações, com este ano a atingirmos um pico de 28 mil,” he stated. “Os preços só se reduzem com mais oferta, mas não existe capacidade para fazer mais.”
The panel of experts, which included CEOs from JPS Group, MAP Group, and LAPLACE Real Estate, identified several key factors exacerbating the crisis. These include a critical labor shortage estimated at 80,000 to 100,000 workers, an “excessive” tax burden on both developers and buyers, and notoriously slow municipal licensing processes. The short-term nature of government stimulus measures, often tied to a single legislative cycle, was also cited as a source of major instability for long-term investment. For a deeper understanding of these challenges, investors can consult with professional constructors.
The government's housing package, announced in September, was described by the speakers as “ambitious” but “pouco exequíveis” (not very feasible). The proposed reduction of the construction VAT rate to 6% was welcomed, but its impact was questioned. João Sousa, CEO of JPS Group, suggested its effects would not be felt for at least 18 to 24 months and criticized its limited duration. “É uma medida corajosa, mas deveria ir além do ano de 2030,” he concluded, pointing to the need for long-term policy certainty.
Madalena Azeredo Perdigão, a real estate partner at CCA Law Firm, added another layer of complexity, reminding the audience that the reduced VAT for properties under €648,000 must first receive approval from the European Commission, a process that could introduce further delays. This highlights the importance of staying current with regulatory and legal frameworks.
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José Rui Menezes e Castro, CEO of MAP Group, argued that the government's plan lacks the “shock measures” needed for immediate impact. He suggested a true shock policy would involve creating conditions to release the existing housing stock onto the market. The feasibility of large-scale construction funded by the Recovery and Resilience Plan (PRR) was also challenged, with speakers noting that municipalities and the Institute for Housing and Urban Rehabilitation (IHRU) lack the administrative capacity to execute the projects before the 2026 deadline.
Regarding the simplification of licensing, architect Nuno Malheiro pointed out that inconsistent legal interpretations among different municipalities undermine the effort. “A mesma lei é interpretada de formas diferentes pelas câmaras municipais,” he said, arguing that true simplification requires uniform rules across all municipalities. This is a key aspect of legal issues in property acquisition.
The conference concluded with a consensus that only a concerted, global effort among all stakeholders could lead to an efficient and effective response to Portugal's pressing housing problems.
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