A decade of policy missteps regarding housing and immigration has culminated in widespread unrest across Portugal, with significant demonstrations erupting in Lisbon's Rossio square and Porto's Praça D. João I. The core of the discontent lies in a stark economic disparity: between 2015 and 2025, house prices increased by 180%, whereas salaries rose by only 43.9%. This divergence has severely degraded access to housing, disproportionately affecting young people and the middle class.
The situation presents a sharp irony for Prime Minister Luís Montenegro, whose government championed youth home purchase support and the Young IRS tax benefit as key pillars of its agenda. Despite these initiatives, Montenegro has become a primary target of public anger, caught in the accumulation of policies often driven by immediate electoral goals rather than long-term consequences. Since 2015, Portugal has seen four major housing strategies alongside numerous legislative changes. Former Prime Minister António Costa introduced affordable rent programs and public housing reinforcement in 2018, followed by the "Mais Habitação" plan in 2023, which included mandatory rental of vacant properties and restrictions on local accommodation.
In 2024, Montenegro's "Construir Portugal" strategy offered IMT and stamp duty exemptions for young buyers, along with public credit guarantees and a new concept of moderate rent. By 2026, the government announced a reduction of VAT to 6% on housing construction under specific conditions and promised simplified licensing. However, these measures have failed to improve accessibility; instead, price acceleration continued. In 2025, prices jumped 17.6%, up from 9.1% in 2024, with the second quarter of 2026 showing a 16.5% increase according to the housing price index.
While prices outpaced wages, construction remained at historically low levels due to licensing bottlenecks, labor shortages, insufficient investment, and low productivity, as identified by the Bank of Portugal. The International Monetary Fund noted in its June 2026 report that government support measures likely contributed to higher prices by stimulating demand in a market unable to respond quickly. This mix of bureaucratic hurdles, rising costs, and increased demand driven by immigration and family structure changes has aggravated a problem festering since 2015.
Critics argue that the persistence of the crisis despite changing governments and priorities demands exceptional emergency measures involving the state, municipalities, and companies to accelerate construction and drastically reduce licensing times. The article questions why the government has not formed a cross-party coalition with the PS, Chega, and Livre parties to launch an emergency housing program. Furthermore, it highlights the absurdity of announcing new subsidies for electric car purchases for disadvantaged families amidst a deep social housing crisis, suggesting that the issue is not a lack of measures, but the insistence on policies that fail to address fundamental supply constraints.
Sources: Observador.