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Bank of Portugal study reveals housing crisis cannot be solved with demand policies

A study by the Bank of Portugal indicates that increasing demand does not resolve the housing crisis, highlighting the need for a broader analysis.

16 October 2026Tagblick Newsdesk

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Archive photo: Bank of Portugal study reveals housing crisis cannot be solved with demand policies — Archive photoPhoto: PORTOARTE · Wikimedia Commons · CC BY-SA 4.0

A study released by the Bank of Portugal (BdP) indicates that the housing crisis in Portugal cannot be resolved solely through demand-side policies. According to the analysis published in the BdP's Journal of Economic Studies, an increase in housing demand leads to higher prices and rents, negatively impacting the price-rent ratio of homes.

The BdP report highlights that a 1% rise in demand results in a 0.69% increase in house prices and a 0.37% increase in rents. The municipalities of Lisbon and Porto have been identified as the most affected by this demand dynamic, reflecting current trends in the real estate market.

The study also emphasizes that to address the housing crisis, it is necessary to focus on supply, as merely increasing demand will not resolve the challenges faced by many citizens in finding affordable housing.

The analysis draws attention to the importance of considering structural measures that can enhance housing supply in the market, rather than implementing only demand-focused solutions.

Furthermore, the research was conducted in the context of a scenario where house prices have been rising significantly, exacerbating the issue of housing affordability in urban areas.

The BdP study was released this Thursday and generates a debate on the need for more effective public policies aimed at balancing supply and demand in the real estate market.

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