European Commission Targets Housing Crisis with Plan Affecting Portugal
The European Commission has put forward its European Affordable Housing Plan, an initiative designed to address the housing crisis prevalent in several member states, with Portugal being a significant area of concern. The proposal includes measures to relax state aid rules, which would permit countries to support housing projects without seeking prior authorization from Brussels. This policy is expected to be implemented by 2026, following a public consultation that gathered over 6,300 contributions.
The public consultation, which concluded on October 21, 2025, saw significant engagement from Portugal, which submitted 244 contributions, ranking it 7th among participating nations. According to a report in Jornal de Negócios, these submissions came from a mix of private citizens, companies, and public authorities, indicating broad-based concern over pricing, accessibility, and regulation within the Portuguese real estate market. These ongoing policy discussions are a key feature of our legal updates news section.
A key proposal under debate in Brussels is a mandate that housing projects receiving public subsidies must adhere to controlled prices for a minimum of 20 years. This measure, if adopted, would have significant implications for the development and investment models for affordable housing in Portugal. The discussion comes as Portugal is identified as having one of the most strained property markets in Europe.
Jornal de Negócios reports that the Portuguese housing market is considered to be overvalued by as much as 35%, creating a substantial financial burden for families. The primary causes cited for this situation are an insufficient housing supply, significant bureaucratic delays in the issuance of construction licenses—a process that can take up to 31 weeks—and the considerable impact of the tourism industry on property prices in high-demand urban areas. These factors contribute to the investment risks within the market.
Need Expert Guidance?
Get personalized insights from verified real estate professionals, lawyers, architects, and more.
The urgency of the situation is underscored by recent Eurostat data, which confirmed that between April and June 2025, house prices in Portugal increased by 17.2% compared to the same period in 2023. This was the highest year-on-year increase recorded in the Eurozone during that period. An analysis of these trends can be found in our market insights reports.
A study referenced by the newspaper warns that in the absence of structural reforms and effective affordable housing policies, the financial strain on Portuguese households will continue to grow. This context makes the swift implementation of the European plan a matter of urgency for the country.
Understand policy impacts on your Portugal property plans at realestate-lisbon.com.