Housing crisis creates “new social challenges” in Portugal – European Commission

The European Commission warned today of “new challenges” related to the housing crisis that increase the risks of poverty and social inequality in Portugal, given that there are more people with excessive housing costs.
“Despite some improvements, the effectiveness of the social protection system in mitigating poverty risks and reducing inequalities remains low, and new challenges have emerged in the housing sector,” indicates the community executive in a report on the social dimension and employment, released today as part of the autumn package of the European Semester.
Specifically, according to Brussels, last year the proportion of the population with excessive housing costs in Portugal was 6.9%, still below the community average of 8.2%, but one of the largest increases in the European Union (EU), by two percentage points.
This is, therefore, “an indicator to watch,” adds the institution, justifying it with “the continuous rise in housing prices and rents in recent years.”
Portugal is one of the EU countries that has been recording annual double-digit 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, in mid-December, a European Plan for Affordable Housing aimed at complementing housing policies at the national, regional, and local levels, while maintaining the principle of subsidiarity, as this is a competence of the Member States.
On December 16, the presentation of this European housing package is scheduled, which includes an EU plan for affordable housing, a proposal to revise the state aid rules related to services of general economic interest, a new European Bauhaus program, and a new strategy for housing construction.
The plan will thus include financing, state aid, and limits on local accommodation.
The European Union is facing a housing crisis in countries like Portugal, where house and rent prices have significantly increased, making it difficult to achieve affordable housing, especially for young people and low-income families.
It is estimated that in the EU, more than one in four people aged 15 to 29 live in overcrowded conditions, with many young Europeans leaving their parents’ home near or after the age of 30 because they cannot afford their own home.
In 2023, about one in ten Europeans spent 40% or more of their income on housing and related costs.