Government Housing Measures Require Concrete Action, States Industry Leader
The Portuguese government's recently announced package of housing measures has been met with cautious optimism by industry leaders, who are now calling for swift and effective implementation. In a published opinion piece, Frederico Abecassis, CEO of the real estate network Coldwell Banker in Portugal, argued that while the proposed initiatives are promising, their success hinges on transforming them from ideas into tangible solutions. He emphasized the need for a coordinated effort between public and private sectors to address the nation's housing crisis.
The new government plan includes several key proposals, such as fiscal benefits for the rental market and, most notably, a reduced Value Added Tax (VAT) rate of 6% for the construction of housing designated as 'moderate value'. Abecassis identified this VAT reduction as a critical step towards tackling what he termed the "Achilles' heel" of the Portuguese real estate sector: the lack of new housing construction. This issue, he noted, particularly affects the middle class, a segment in urgent need of viable housing options.
Citing a 2024 study from the National Institute of Statistics (INE), the article highlights a severe deceleration in the growth of Portugal's housing stock. The report found that only 3% of existing buildings in 2021 were constructed in the preceding decade (2011-2021). This stark decline in construction activity compared to previous decades has had a direct and negative impact on the supply of homes available to the middle class, especially in high-demand urban centers.
Abecassis asserted that for too long, the housing debate in Portugal has been characterized by "promises and impasses," with solutions failing to advance at the necessary pace. He now perceives "concrete signs of change" and a new centrality for housing policy on the national agenda. This shift is complemented by a recent decrease in interest rates, which has improved market liquidity and access to credit for many families.
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The real estate leader called for structural housing policies that can endure beyond political cycles, stating that "housing cannot be an ideological battlefield." The primary objective, he argued, must be to ensure that families have access to dignified and affordable homes and to prevent the country's youth from leaving Portugal due to the housing crisis. To achieve this, he advocated for the simplification of licensing procedures, the strategic use of state-owned property for housing projects, and the creation of an attractive framework for private investment in the middle-class housing segment.
He pointed to international examples where balanced models have successfully combined profitability for investors with accessibility for residents. The Portuguese real estate sector, Abecassis affirmed, possesses the talent, reputable companies, and motivation to contribute to a solution. He concluded that the new housing policy has the potential to provide the necessary institutional framework for progress, but warned that there is no more time to waste in its implementation.
The government's ability to execute these measures will be closely watched by the market. The proposals to streamline licensing and unlock public land for development are seen as essential steps to increase the housing supply and, ultimately, create a more balanced and accessible real estate market for all segments of the population.
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