Soaring Rents and Strained Clinics: Portugal’s Young Face Growing Squeeze

Portugal’s promise of a fair hand-off between generations is fraying. A fresh report from the Institute of Public Policy, prepared for the Calouste Gulbenkian Foundation, reveals that housing shortages and a weakening health system have erased most of the advances made before the pandemic, leaving younger residents to shoulder rising costs and shrinking opportunities.

Snapshot for Busy Readers

• Intergenerational Justice Index (IJI) slipped from 0.50 in 2021 to 0.43 in 2023, its worst reading in a decade.

• Housing is the single biggest drag: prices up >100 % in 10 years, indicator falls to 0.23.

• Health declines almost as sharply, tumbling to 0.35 amid growing out-of-pocket bills and mental-health strain.

• Public finances and job security show mixed signals, but long-term pension liabilities continue to swell.

Why the Score Matters for Portugal’s Future

The IJI compresses six pillars—environment, labour market, housing, poverty & living conditions, public finances and health—into a single 0-to-1 scale. Scores closer to 1 mean today’s policies leave tomorrow’s Portuguese better off. The latest dip, concentrated in 2022-23, breaks the steady climb seen up to 2020 and places Portugal near the bottom of the Western European pack, just ahead of Greece.

Demographers warn this slide comes at a delicate moment: the country’s working-age population is projected to shrink 27 % by 2050, raising the stakes for every euro spent—or not spent—today.

Homes Out of Reach: The Housing Squeeze

Lisbon’s cobbled lanes may look postcard-perfect, yet for many under-35s they spell exile. Between 2015 and 2025, asking prices for property soared 105 %, while median wages barely budged.

Key pressure points:• Affordability gap: Home prices now average €2 675 /m², more than 11 times the median annual salary in Greater Lisbon.• Delayed independence: Portugal tops the EU for young adults living with parents—63 % of 25-34-year-olds in 2024.• Rental pinch: Long-term lets shrank after a boom in short-term tourist rentals; the “Mais Habitação” law attempted to cap Airbnb-style listings, yet analysts say enforcement is patchy.

Paulo Trigo Pereira, who led the study, argues the “failure to scale up social and affordable housing after 30 years of warnings” turned a market imbalance into a structural threat to generational equity.

Strain on Body and Mind: Health System Weaknesses

Portugal’s renowned universal system still delivers strong life-expectancy numbers, but access has deteriorated:

• Primary-care vacancies leave roughly 1.5 M residents without a family doctor.• Out-of-pocket health spending rose to 35.3 % of total expenditure, well above the EU-27 average of 21 %.• Consumption of anxiolytics and antidepressants jumped 19 % from 2019-24.

The IJI health sub-score fell from 0.57 in 2021 to 0.35. Mental-health gaps are widening fastest, the authors note, adding that prevention budgets have been “the easiest target for short-term savings”.

Public Coffers, Jobs and Other Warning Lights

Beyond bricks and clinics, the index flags two longer shadows:

Public debt remains above 98 % of GDP, despite record tourism receipts.

Social-security liabilities have ballooned since 2016; actuaries expect the pension fund to tip into deficit by 2032 without fresh revenue.

Meanwhile, the labour market posts a paradox: unemployment is near historic lows at 6.4 %, but insecure contracts cover 1 in 5 workers under 30, limiting their ability to plan for homes, families or savings.

What Lisbon Has Tried – and Where Gaps Persist

Government announcements in 2025 arrive thick and fast:

• €2.7 B programme to build or refurbish 26 000 public-housing units, the largest outlay since the 90s.

• Tax breaks—no IMT or stamp duty—for first-time buyers under 45 years, and a proposed 100 % state-backed mortgage for 18-35-year-olds.

• Extension of the “IRS Jovem” discount for ten years of earnings, uncoupled from degree status.

• Health-side pledges to expand palliative-care beds and complete an overdue digital patient-records network.

Yet urban-planning lags, lengthy permitting and skilled-worker shortages threaten to blunt the impact, experts caution.

Voices from Academia and Civil Society

• Ana Cristina Costa, sociologist at NOVA FCSH, points out that “housing and mental health intersect—crowded living arrangements feed anxiety, which in turn weakens labour productivity.”• The youth NGO GerAção calls the index “a mirror politicians can’t ignore,” urging cross-party support for a long-term housing pipeline insulated from four-year electoral cycles.• EU Commissioner Nicolas Schmit, during a September visit to Porto, hinted that Portugal could tap additional Recovery and Resilience Facility funds if it links housing reforms to climate-efficiency targets.

What to Watch Next

With the 2026 Budget now under debate, parliament must decide whether to ring-fence extra revenue from the bank windfall tax for affordable housing, and whether to lift the cap on preventive-health funding to 6 % of total NHS expenditure.

Investors are monitoring whether the end of Golden Visas diverts capital or simply shifts it into commercial property. Meanwhile, the IJI team plans an interim update in late 2026; its verdict will show whether today’s promises translate into tangible gains for the generation that will pay tomorrow’s bills.