LISBON – Portugal’s leading real estate companies have welcomed the government’s latest housing market reforms, but industry executives are warning against expectations of an immediate surge in available homes.

The government has introduced measures aimed at simplifying licensing, encouraging construction and bringing more properties into the rental market. However, real estate executives say structural obstacles remain.

Long approval periods, construction delays and labor shortages continue to restrict supply. Therefore, the industry believes the reforms may need several years before producing a visible impact.

Property Companies Welcome Portugal’s Housing Reforms

Major real estate networks including ERA, Keller Williams, Remax and Zome broadly support the direction of the reforms.

Nevertheless, none of the executives consulted by ECO reported a significant increase in homes currently available for sale or rent as a direct result of the measures.

The government’s strategy includes simpler licensing procedures and greater use of public and private land.

Moreover, Portugal has introduced measures designed to stimulate construction and moderate rents. The government says its objective is to increase housing supply while making access to homes easier.

The industry agrees with that objective. However, executives stress that legislation alone cannot immediately create new housing.

New Housing Supply Will Take Time

Official figures provide some positive signals.

The number of licensed housing units increased by 21% in 2025. More than 41,000 units received licenses, compared with fewer than 35,000 a year earlier.

However, receiving a license does not mean a home immediately reaches the market.

Projects still need financing, construction workers and sufficient building capacity. In addition, municipal approval times can differ significantly across Portugal.

ERA Portugal director-general Rui Torgal expects the impact to become more visible over the next two to four years. Keller Williams Portugal also considers it too early to identify a major increase in new residential developments.

Therefore, industry optimism remains cautious.

Lower Construction Tax Could Help Supply

Tax incentives are another important part of the strategy.

The sector has highlighted the reduction of VAT from 23% to 6% for qualifying construction and rehabilitation projects. The measure covers certain homes intended for permanent residence or rental.

Industry representatives believe lower construction costs could make more projects financially viable.

In particular, the measure may support development in market segments where demand remains strong and housing supply is limited.

However, construction costs are only one part of the problem.

Administrative delays and labor shortages can still prevent projects from reaching the market quickly.

Rental Market Remains a Major Challenge

The rental sector presents another obstacle.

Portugal’s government approved changes to rental rules in July 2026. Among the measures is a shorter period of unpaid rent before landlords can begin eviction proceedings.

The government hopes stronger legal protection will encourage property owners to return vacant homes to the rental market.

Real estate executives support measures that improve confidence. However, they remain doubtful about an immediate increase in rental supply.

Many owners still consider selling a property safer and more predictable than renting it.

Consequently, changing the rules may not be enough by itself.

Stability Could Determine Success

Industry leaders repeatedly point to regulatory stability as a key factor.

Property development requires long-term planning. Investors must understand the rules before committing capital to projects that may take years to complete.

Frequent changes can therefore weaken confidence.

Meanwhile, landlords need predictable rental regulations before deciding whether to make properties available to tenants.

This explains why real estate companies support the government’s reforms while resisting excessive optimism about their immediate effects.

Housing Crisis Requires Long-Term Solutions

Portugal continues to face a structural shortage of housing.

Building and rehabilitating more homes are widely regarded as essential parts of the solution. However, construction requires land, financing, workers and efficient public administration.

As a result, the effectiveness of the reforms will depend heavily on implementation.

Municipalities must process projects efficiently. Developers must turn approved plans into completed homes. At the same time, rental rules must provide sufficient confidence for both landlords and tenants.

For now, Portugal’s property sector sees the government’s housing market reforms as a positive step.

However, executives are keeping expectations under control. The real test will be whether the reforms eventually translate into more homes for sale and rent rather than simply more approved projects.