Portugal is short of homes, and it also has 723,000 empty ones

Ask anyone in Lisbon or Porto about housing and you’ll hear the same thing: there aren’t enough homes. The Banco de Portugal puts the shortfall at around 300,000. Then you open the 2021 Census and find a second number: 723,215 homes across the country were empty when it was taken, 12.1% of the whole housing stock.

Both are true. How they fit together says a lot about where the Portuguese market is heading.

Most of those empty homes are not for sale

Only 236,927 of the 723,215 were listed for sale or rent. That leaves roughly 486,000 homes that were simply closed, and more than 230,000 of the empty homes needed repairs. The reasons are not exotic. An owner died and the heirs haven’t agreed what to do. A building needs works that nobody has paid for. A piece of paperwork stalled years ago and nobody went back to it.

It is also not only a Lisbon story. The capital has the most in absolute terms, 47,748 homes or 14.9% of its stock, but Porto has 20,270, Sintra 17,035, Coimbra 15,854 and Vila Nova de Gaia 13,523. By region, vacancy is highest in the Alentejo (16.5%) and lowest in the North (10.3%).

A caveat: these are 2021 figures. Some of those homes have since been sold, renovated or occupied, and we’d welcome fresher data. But nothing suggests the pattern has changed much.

New homes are coming, slowly

In 2025, Portugal licensed 48,844 homes, the highest figure since 2011. It completed 30,425. In 2007, the country completed 67,500.

Licensed is not the same as built. Projects take years, and some licensed schemes never start. The developers’ association APPII estimates that each year of licensing delay adds about €500 per square metre to the final price. That is an industry estimate, but it matches what we hear from people building.

Meanwhile prices haven’t waited. In the first quarter of 2026, house prices were up 17.8% year on year, the biggest rise in the EU. Rents on new contracts rose 9.1% to €9.46 per m². Sales fell 8.7% to 37,745 in the quarter, so there were fewer deals at higher prices. The Banco de Portugal says new homes have begun to catch up with new households, helped by slower net immigration. The backlog remains.

What changed on 1 October

The revised urban planning and building regime (Decreto-Lei 108/2026) came into force on 1 October. It was meant to start in August but was postponed. The changes fall into two groups.

On speed, decision deadlines now run phase by phase instead of as one global deadline tied to floor area. Councils have 20 days for simpler building works, 30 for urbanisation and 45 for subdivisions. If they miss the deadline, the request is deemed approved. More minor works, such as upkeep, energy upgrades and some reconstruction, need no licence at all. Submissions go through a single online platform, the same for every council.

On legal footing, the time limit to declare an issued licence void drops from 10 years to 3. The follow-up window on fast-track works notifications drops from 10 years to 1. Challenging a licence no longer halts works on the spot. And deeds for urban properties must now state whether the urban title exists, or the sale can be voided.

Our read

Faster on paper, yes. We would not call it fast yet. The 2024 reform promised something similar, and the preamble to the new decree admits that it created difficulties of its own. Councils can still extend complex cases. The real test is how municipalities apply the rules over the next year.

For buyers and investors, the deed rule is the one to remember: check the urban title before you sign, not after.

We think the quickest source of new supply is the stock that already exists. The new rules help someone building from scratch. They do little for a house shared between five heirs who can’t agree, or a building that needs works its owners can’t afford. Solving those cases would put homes on the market that already have walls and a roof.

If you own an inherited or empty property and aren’t sure whether to sell, rent or renovate, get in touch. We value it by scenario, so you can see the options before you decide.

Sources: INE (Census 2021, Q1 2026 price and rent indices, building licences and completions), IHRU, Pordata, Banco de Portugal, Eurostat, APPII, Decreto-Lei 108/2026 and law firm summaries.