Portugal’s ‘record’ population increase adds to nation’s housing crisis

Portugal’s revised population numbers have deepened the country’s housing crisis, with experts estimating the national housing shortage has risen to almost 300,000 homes since the country reached its record population of 11.42 million.

According to analysis reported by Expresso newspaper, the updated population figures released by National Statistics Institute INE may have increased Portugal’s housing shortage by around 19,000 homes – taking the estimated deficit from 274,000 to approximately 293,000 dwellings.

Ricardo Guimarães, director of property market database Confidencial Imobiliário, said the revised data has reduced Portugal’s average annual rate of new housing construction from 2.51 to 2.42 homes per 1,000 inhabitants. By comparison, the eurozone average stands at 5.13 homes per 1,000 residents.

“With the increase in population, the gap has widened, pushing the construction deficit from 274,000 to 293,000 homes — an increase of around 7%,” he told Expresso.

Guimarães described the estimate as conservative, noting that countries such as Finland and Luxembourg build around seven homes per 1,000 inhabitants each year—almost three times Portugal’s annual construction rate.

Empty homes do not solve supply problem

The findings underline a long-standing paradox in Portugal’s housing market. Although the 2021 Census identified more than 723,000 vacant or unoccupied properties — about 12% of the national housing stock at the time — most were/ are not available where demand is strongest.

Many vacant properties are located in low-demand inland regions, while housing pressure remains concentrated in Lisbon, Porto and other coastal metropolitan areas.

According to 2021 data from INE and IRHU (the Institute for Housing and Urban Rehabilitation), around 250,000 homes suitable for sale or rent were tied up in inheritance disputes or court proceedings; 237,000 required major renovation, and 236,000 were vacant and potentially available to enter the market.

However, experts interviewed by Expresso caution that these figures are now almost five years old and may no longer accurately reflect current conditions.

Guimarães suggests that population growth has probably absorbed many properties previously classified as vacant.

“Many of those homes are likely already occupied,” he said, adding that some may have entered the rental market informally, and therefore remain absent from official statistics.

Guimarães also stresses that the additional population is unlikely to have resulted in widespread homelessness or the emergence of informal settlements, indicating instead that many people are living in overcrowded accommodation, or unregistered rental arrangements.

Call for real-time housing data

Former IHRU president Victor Reis believes Portugal should abandon its once-a-decade housing census in favour of a permanent system using administrative data from the Tax Authority and the national land registry.

“Holding a housing census every ten years makes no sense,” he told Expresso.

Housing economist Vera Gouveia Barros agrees that more detailed and up-to-date information is needed, particularly on housing types, locations and active rental contracts.

“The Tax Authority already has much of this information, and we need access to it if we are to properly assess the impact of population growth on housing and design effective public policies,” she said.

Barros also warned that overcrowding appears to be particularly acute among immigrant communities from the Indian subcontinent, estimating that around 70% may be living in overcrowded conditions.

At the same time, she highlighted another overlooked issue: under-occupation. Large homes occupied by elderly people living alone could, in some cases, be redesigned into multiple smaller housing units, increasing supply while also addressing social isolation.

Source: Expresso