A recent study by Portada reveals that house prices rose by 41.5% in five years, while new home construction remains far below levels recorded at the start of the century.
Portugal has recorded the largest increase in house prices in the European Union since 2020, as limited construction and rising affordability concerns continue to pressure households.
According to the statistical database of the Francisco Manuel dos Santos Foundation (FFMS), prices surged by 41.5% between 2025 and 2025, the largest rise among the 18 EU countries that recorded increases over the period. Since 2010, rates have climbed 81.9 %, the third-highest increase among the 23 member states with rising prices.
Published as part of Factualmente, a new FFMS initiative that examines commonly held beliefs against available statistical evidence, the first edition focuses on housing and highlights the gap between the cost of buying a home, the supply of new properties, and the financial resources available to families.
The latest figures from the National Statistics Institute (INE) reflect the scale of the increase, with the median price of family homes sold in Portugal reaching €2,076 per square metre in 2025, up 16.8% on the previous year.
Greater Lisbon remained the most expensive subregion, with a median of €3,439 per square metre, followed by the Algarve at €3,139, as the Setúbal Peninsula recorded €2,596 per square metre, while the Porto Metropolitan Area reached €2,305.
Household budgets
These figures suggest affordability has become a nationwide concern, not a problem confined to Portugal’s largest cities.
The FFMS’s Barómetro das Cidades found that 66% of respondents considered housing the most important area for public intervention, with almost eight in 10 disagreeing that it was easy to find suitable accommodation at a reasonable price.
This situation appeared particularly difficult in the country’s two largest metropolitan areas, as the proportion who rejected the idea that affordable housing was easy to find reached 82% in Lisbon and 88% in Porto.
More than half of respondents nationwide (51%) also said housing expenses affected their ability to cover other costs.
Earlier findings from the FFMS’s 2023 Barómetro da Habitação painted a similar picture.
Six in 10 people reported difficulties meeting their monthly housing expenses, while one in four said problems accessing accommodation had already influenced important life decisions.
Furthermore, around one in nine feared losing their home within the following five years, and 34 % said they had nowhere to go if they were forced to leave their current property.
New construction
Despite rising prices, new home construction has not yet returned to the levels seen at the beginning of the century.
Portugal built about 27,000 new homes in 2025, up 11% from the previous year.
However, that total represented less than a quarter of the number recorded at the start of the 2000s.
The sharpest decline came during and after the financial crisis that began in 2011, with construction falling 35% annually in both 2012 and 2013.
Meanwhile, recent construction has also shifted toward smaller properties.
As reported by ECO, the share of newly built homes classified as studios or one-bedroom properties has nearly doubled, reflecting changes in the types of accommodation entering the market.
The FFMS also examined the availability of vacant properties, but the foundation describes the belief that empty homes alone could solve the housing crisis as imprecise.
Research by the Bank of Portugal indicates that some municipalities, particularly in parts of the Lisbon and Porto metropolitan areas, the Oeste region, the Aveiro area and the Setúbal Peninsula, have relatively few vacant properties compared with demand.
Although bringing unused homes onto the market could ease pressure in many municipalities, not all are immediately habitable, as some require substantial renovation, while others are tied up in inheritance disputes or unresolved legal proceedings.
Social housing
The FFMS also challenges the perception that Portugal has one of the highest homeownership rates in the eurozone.
Eurostat figures cited in the foundation’s book “O Papel da Casa nas Finanças Pessoais”, written by Ana Isabel Sá and published in 2026, show that 73% of households lived in owner-occupied accommodation in 2024, which was above the eurozone average of 65%, but placed Portugal ninth among the bloc’s 20 countries.
These findings suggest that home ownership is widespread in Portugal, but not as dominant as the common perception might imply.
In contrast, the foundation considers the view that Portugal has a limited supply of social housing to be accurate.
Estimates from the Organisation for Economic Co-operation and Development (OECD) put social housing at just 1% of the national housing stock in 2021, leaving Portugal with one of the lowest proportions in the eurozone, ahead only of Lithuania.
Home purchases
The report also questions the assumption that Portuguese households generally buy homes because they prefer ownership.
According to the 2020 Survey on Household Financial Situation, only 24% of families who bought a home between 2011 and 2020 said they did so because they preferred owning their property regardless of the financial return.
Some 39% said their mortgage repayments were lower than the rent they would otherwise have paid, while 36% viewed the purchase as a good investment, making economic considerations more prominent.
The FFMS also finds the perception accurate that most tenants would prefer to buy a property but lack the financial means to do so.
These difficulties are particularly clear in ownership figures for younger generations, with Census data from 2021 showing that 42 % of people aged between 25 and 34 who were born from 1987 to 1996 owned their home.
Among previous generations, the proportion of homeowners at the same age was considerably higher, at 61% for those born between 1977 and 1986, 70% for those born between 1967 and 1976, and 55% for those born between 1957 and 1966.
Only the generation born between 1947 and 1956 recorded the same ownership rate of 42%.