Portugal to Launch €1.3 Billion Housing Initiative and Overhaul State Property Management
The Portuguese government has announced a new strategic push to address the country's housing crisis, headlined by a €1.3 billion credit line for affordable housing and a sweeping reform to activate unused state-owned properties. Prime Minister Luís Montenegro detailed the measures at the conclusion of the PSD's 21st Summer University in Castelo de Vide, signaling a significant policy shift aimed at increasing the housing supply and streamlining the sector's administration.
The cornerstone of the financial plan is a credit agreement for over €1.3 billion with the European Investment Bank (EIB), which is scheduled to be formally signed this coming Thursday. This capital injection is designated specifically for the development of affordable housing projects across the country, a move intended to alleviate market pressures. The policy's objectives are to create more accessible rental and purchase options for Portuguese families who are currently priced out of the market, particularly in high-demand urban areas.
In parallel with the new funding, the government is implementing a strict new protocol for the management of the state's extensive real estate portfolio. All public entities will be mandated to provide a justification for any properties that are currently unused. According to the Prime Minister, assets that lack a clear and immediate plan for utilization will be transferred to Estamo, the state-owned real estate company. Estamo will then be empowered to develop, sell, or lease these properties to bring them into productive use for the housing market.
"We have been deceiving ourselves for too long," stated Montenegro during his speech. "That will end. We will not allow public heritage to be degraded without use and without justification. Where no justification exists, it must be made available to be leveraged, either in the public or private sphere." This measure is designed to unlock a significant supply of land and buildings that have remained dormant, contributing to the housing shortage.
Further administrative reforms include the creation of a unified digital property file. This initiative aims to consolidate all certified documents for a property, with future plans to integrate the tax registry (matriz predial) and the land registry description (descrição predial). The goal is to create a single, comprehensive digital identity for each property, eliminating the need for citizens and businesses to navigate multiple government agencies to gather paperwork for transactions.
The government also intends to redefine the roles of key institutions within the housing sector to eliminate overlaps and improve efficiency. The Institute for Housing and Urban Rehabilitation (IHRU) will be formally designated as the primary body for coordination, regulation, and planning of public housing responsibilities in Portugal. Financial operations, in turn, will be channeled through the Banco Português de Fomento, which will act as the main financing partner for projects aimed at delivering affordable homes.
Responsibility for the direct execution and management of the public housing stock will be decentralized to local municipalities. The Prime Minister committed to providing these local authorities with the necessary technical and financial conditions to effectively manage state housing assets within their jurisdictions. "Each monkey on its own branch," Montenegro remarked, emphasizing the need for clear and distinct responsibilities for each government body involved in the housing process.
The government will also continue negotiations to establish a guarantee line through the Banco Português de Fomento to support the 133,000 public housing units outlined in existing local housing strategies. Montenegro criticized previous administrations for failing to provide the necessary means to execute these plans, a situation his government now seeks to rectify.
Acknowledging the scale of the challenge, the Prime Minister conceded that resolving the housing crisis will take time. "The challenge is giant, but it must be overcome and won," he affirmed. "It will take a few years, but it will happen. Those who demand results in months, or even a year or two, after having failed for more than a decade, will have to be patient, because we will insist, we will decide, and we will, patiently, with the Portuguese people, achieve the result."
This comprehensive strategy reflects a determined effort to intervene directly in the housing market by boosting supply through both new construction and the activation of state assets. The policy announcement has been received with cautious optimism by market analysts, who see the measures as a necessary step toward addressing the structural imbalances in Portugal's real estate sector.
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