According to leading Portuguese property experts, Idealista, Portugal’s housing market is currently grappling with significant challenges, as banks express their willingness to finance more housing projects. However, they emphasize the urgent need for government policies to stimulate housing supply. This situation was highlighted during the recent ‘Observatório do Imobiliário’ conference in Lisbon, where banking leaders discussed the current state of the housing market and the obstacles that hinder progress.
Banks Ready to Finance More Housing
Idealista explain that during the conference, prominent banking executives, including Miguel Maya from BCP, Paulo Macedo from Caixa Geral de Depósitos (CGD), and João Pedro Oliveira e Costa from BPI, shared insights into the current liquidity and capital available for housing projects. They noted that while banks have the resources to support more construction and housing loans, the absence of effective public policies is a significant hurdle.
Maya pointed out that the state has failed to create policies that could proactively address the housing shortage. He acknowledged the positive impact of measures aimed at young buyers, such as exemptions from property transfer tax (IMT) and public guarantees on housing loans, which have led to a notable increase in credit production for this demographic.
The Need for More Housing Supply
Despite the banks’ readiness to lend, the executives stressed the ongoing shortage of housing in Portugal. Macedo highlighted that CGD lent €4.1 billion for housing loans in 2024, with a significant increase in January 2025. He emphasized the need for more homes in the market, particularly as many properties purchased are used rather than new.
To address the housing shortage, Macedo suggested that intervention in land prices and the release of land for development are crucial. He also mentioned the potential for converting commercial and office spaces into residential units, although he acknowledged that more needs to be done in this area.
Bureaucracy as a Barrier
BPI’s Oliveira e Costa pointed out that excessive bureaucracy is a major obstacle to housing development. He noted that the lengthy processes involved in obtaining licenses and approvals can delay projects for years, which exacerbates the housing crisis. He called for a central political orientation aimed at reducing bureaucratic hurdles to expedite housing projects.
Record Housing Loans in 2024
Despite the challenges, the housing loan market in Portugal saw a record high in 2024, with banks lending €17.6 billion in new housing credits, a 34% increase from 2023. This surge was largely driven by loans to individuals under 35, who accounted for 47% of new contracts for permanent housing between August and December of the previous year.
The banking leaders expressed optimism about the future of housing finance in Portugal, provided that the government takes decisive action to address the supply issues. They believe that with the right policies in place, the housing market can stabilize and better meet the needs of the population.
