Brussels warns Portugal’s housing crisis creates ‘new challenges’
According to Brussels, last year the proportion of the population with excessive housing costs in Portugal was 6.9%, still below the EU average of 8.2%, but one of the largest increases in the EU.
The European Commission on Tuesday warned of “new challenges” related to the housing crisis that increase the risks of poverty and social inequality in Portugal, as more people are facing excessive housing costs.
“Despite some improvements, the effectiveness of the social protection system in mitigating the risks of poverty and reducing inequalities remains low, and new challenges have emerged in the housing sector,” the EU executive said in a report on the social dimension and employment, released today as part of the European Semester autumn package.
Specifically, according to Brussels, last year the proportion of the population with excessive housing costs in Portugal was 6.9%, still below the EU average of 8.2%, but one of the largest increases in the European Union (EU), at two percentage points.
This is therefore “an indicator to monitor”, the institution says, justifying it with “continuous increases in house prices and rents in recent years”.
Portugal is one of the EU countries that has been recording double-digit annual growth rates in house prices, driven by strong demand and limited supply.
Due to the acute housing crisis in the EU, the European Commission will present a European Plan for Affordable Housing in mid-December, aimed at complementing housing policies at national, regional and local levels, while maintaining the principle of subsidiarity, as this is a competence of the Member States.
This European housing package is scheduled to be presented on 16 December. It includes an EU plan for affordable housing, a proposal to revise the state aid rules on services of general economic interest, a new European Bauhaus programme and a new strategy for housing construction.
The plan will include financing, state aid and limits on local accommodation.
The European Union is facing a housing crisis in countries such as Portugal, where house prices and rents have risen significantly, making it difficult to find affordable housing, especially for young people and low-income families.
It is estimated that in the EU, more than one in four people aged between 15 and 29 live in overcrowded conditions, with most young Europeans leaving their parents’ home around or after the age of 30 because they cannot afford to buy their own home.
In 2023, around one in 10 Europeans spent 40% or more of their income on housing and related costs.