Veteran Politician Doubts Portugal’s Housing Fix Will Curb Rent Squeeze

Renters in Portugal have new promises on the table, fresh money in the pipeline and a seasoned political voice warning that none of it will be enough. With housing costs still squeezing both locals and the fast-growing community of foreign residents, the country’s latest strategy aims to grow supply, streamline bureaucracy and bring landlords back to the long-neglected rental market. The question expats keep asking—will it actually tame prices in Lisbon, Porto and beyond—remains wide open.

Why the housing showdown matters to newcomers

Portugal’s attraction has hardly dimmed since the golden visa years: sunshine, low crime, Schengen access and a vibrant tech scene. Yet the same magnetism has pushed average Lisbon rents almost 70 % higher in five years, according to housing portal Idealista. International arrivals face bidding wars for T2 apartments, while locals commute ever farther from city centres. Any policy that shifts supply or eases rent regulation therefore lands directly in expat budgets—and shapes residency choices for digital nomads, retirees and multinational staff.

Inside “Construir Portugal”: six pillars, 30 measures

The centre-right government packaged its response under the banner Construir Portugal: Nova Estratégia para a Habitação. Unveiled last year and updated this summer, the plan bundles 30 initiatives across six policy axes: legal simplification, supply incentives, public-sector building, rental confidence, youth housing and overall affordability. Highlights include a European Investment Bank credit line worth €1.3 B to finance 133 000 public homes, a digital “identity card” that trims licensing paperwork, and reinforced powers for the state housing agency IHRU. Officials insist the blueprint will unlock a mix of public, private and cooperative projects—roughly 59 000 affordable units by 2030—while cutting approval times that currently average 18 months in Lisbon.

The funding mechanics and time frame

Money flows from three main taps: the national budget, Portugal’s slice of the EU Recovery and Resilience Facility and the fresh EIB credit routed through Banco Português de Fomento. In total, €4.2 B has been earmarked for affordable housing through 2026, with another wave scheduled for the decade’s end. The government wants half of that spend tied to shovel-ready projects before the next general election. For expats, the timeline matters: the bulk of new stock will not appear until 2027-2028, meaning near-term price relief hinges on rental incentives rather than brick-and-mortar supply.

Marques Mendes: the veteran critic turns up the heat

Enter Luís Marques Mendes, former minister and now Prime-Time pundit. On multiple Sunday broadcasts he has labelled the strategy “ainda insuficiente”—still inadequate. His core arguments: construction takes years, so policymakers must jump-start the dormant rental market immediately; investor confidence is shaky after years of abrupt rule changes; and the government missed a golden moment, when the President vetoed earlier housing legislation, to forge a cross-party pact. Without that credibility boost, he warns, “owners will keep properties off the market and tenants will keep paying over the odds.”

Expert forecasts: fragile optimism, tough headwinds

Economists tracking Portugal and Spain see a split outlook. Subsidised financing for lower-income buyers—mirroring Brazil’s Minha Casa, Minha Vida—should buoy construction firms and absorb part of the demand backlog. Yet persistently high ECB rates near 4 %, pricey building materials and limited urban land could offset those gains. Colliers International projects Portuguese housing completions rising only 8 % next year, well below the 15 % growth politicians tout. Analysts add that unless Portugal fixes judicial delays in eviction and reinforces long-term rental contracts, foreign investment funds may steer capital to Poland or Greece instead.

Parliamentary chess: is a grand bargain possible?

Marques Mendes is not alone in calling for a “pacto de regime”—a durable accord spanning left and right. The Socialists want more public stock and tighter tourist-rental rules, while conservatives push tax breaks and public-private partnerships. Smaller parties float everything from rent caps to one-stop permitting hubs. With municipal elections looming, compromise looks elusive. Still, insiders note that several reforms—such as a cut in VAT on renovation to 6 %—already enjoy broad support and could pass before year-end.

What foreign residents should watch next

Rents will not plummet overnight, but three milestones could shift the dial: the rollout of the digital property ID in early 2026, an expected ECB rate cut sometime in 2026, and the first tranche of EIB-funded public housing hitting the market, likely in Setúbal and Vila Nova de Gaia. Prospective renters should monitor Porta 65 subsidies, which are being widened to age 38, and keep an eye on municipal tax incentives that some councils, like Braga, are already offering to long-term landlords. Home-buyers, meanwhile, may find fixed-rate mortgages easier to secure once the state finalises a planned public guarantee covering 100 % of loan-to-value for under-35s.

The bottom line: Portugal’s leadership has pinned its credibility on solving the housing crunch. Whether the blueprint materialises fast enough to cool expat-heavy hotspots remains uncertain—but the debate has never been more central to the country’s social and economic future.