On Friday, the Portuguese government introduced a significant €2 billion spending package to tackle the nation's ongoing housing crisis. The initiative, which aims to build around 33,000 homes by 2030, targets families struggling with unaffordable rent and home prices, particularly in major cities like Lisbon.
Infrastructure Minister Miguel Pinto Luz outlined the plan, stating that 10,000 of the new homes will receive 100% non-refundable financing, while the remaining 23,000 homes will benefit from public grants covering 60% of the construction costs. The package, financed entirely through the state budget, builds on existing efforts that aim to deliver 26,000 homes by 2026, bringing the total to 59,000 new homes by 2030.
"This is the largest public housing investment in recent decades," said Pinto Luz, emphasizing the government's commitment to ensuring affordable housing for those in need. Prime Minister Luis Montenegro echoed this sentiment, assuring that the new spending package would not threaten the country's fiscal stability and would work in tandem with private and cooperative initiatives.
Portugal's housing crisis stems from a severe lack of affordable housing, worsened by an influx of wealthy foreign investors taking advantage of residency-linked property investments and tax incentives. Additionally, a booming tourism industry has led to a surge in short-term holiday rentals, further squeezing the housing market.
In Lisbon, the impact has been particularly severe, with rents rising by 94% since 2015 and house prices increasing by 186%, according to housing data specialists Confidencial Imobiliario.
Portugal is not alone in facing such challenges. Other European countries, including Greece, Spain, and Germany, have introduced measures to limit short-term rentals, as they too struggle with rising property prices and housing shortages.
