Housing Conditions in Portugal: What Buyers and Investors Need to Know About the Property Market

If you are considering buying property in Portugal—whether for lifestyle, relocation, or investment purposes—you may have encountered headlines highlighting challenges within the Portuguese real estate market, particularly concerning housing conditions.

While some of this coverage can appear alarming, it is not entirely without basis. Against the backdrop of an ongoing housing crisis, it is important to look beyond the headlines and examine the underlying factors shaping Portugal’s property market today.

Despite Portugal’s reputation for quality of life and affordability, official data from the National Institute of Statistics (INE) highlights persistent challenges related to the physical condition and energy efficiency of the country’s housing stock. These issues reflect the age of much of Portugal’s built environment and underscore the need for continued renovation and modernisation.

One of the most pressing concerns is thermal comfort. In 2024, 15.7% of the population lived in households that could not afford to keep their homes adequately warm, a figure significantly higher than the EU average of 9.2%. This points to widespread energy inefficiency, particularly in older properties that lack insulation, modern heating systems, or effective climate control in which residents rely on portable heaters.

The problem is structural rather than climatic, as Portugal’s winters are relatively mild, with an average temperature range of 5 °C to 14 °C, and therefore should not represent a significant challenge in terms of maintaining comfortable temperatures. However, inadequate insulation, heating, and energy efficiency results in levels of thermal discomfort significantly above the European average.

Read More:

Cold Houses in Portugal: The Olarias Case Study

Housing quality issues extend beyond heating. INE data shows that 34.2% of the population lives in dwellings with at least one fundamental structural problem, including inadequate sanitary facilities or defects in the physical structure of the building.

Conditions have worsened in recent years, with 32.1% of the population in 2025 living in housing affected by leaking roofs, damp walls, or rotting floors or windows, up from 23.5% in 2022. This sharp increase highlights the deterioration of aging buildings and insufficient maintenance.

The age profile of Portugal’s housing stock is a key contributing factor. According to the 2021 Census, 23.1% of homes were built before 1960, while just 17.9% were constructed after 2000. Although 110,784 new buildings were completed over the past decade, they represent only 3.1% of total housing stock, meaning that modern, energy-efficient homes remain the exception rather than the norm. Only 2.5% more new homes were built in 2021 compared to 2011, despite the massive increase in demand shown by house prices more than doubling over that period.

As a result of Portugal’s aging housing stock, 35.8% of buildings require repairs, and 4.6% need major structural intervention. Comfort-related amenities remain limited, with 83.4% of homes lacking air conditioning, a figure that improves to 63.5% among properties built in the last decade, indicating gradual progress in newer developments.

Together, these figures illustrate a housing system under strain, characterised by aging structures, energy inefficiency, and rising maintenance needs.

Compounding these challenges, Portugal is home to more than 700,000 abandoned properties, many in advanced states of decay. Collapsed roofs, boarded-up entrances, deteriorating façades, and compromised structural integrity pose safety risks and detract from surrounding communities.

These neglected assets stand in stark contrast to Portugal’s architectural heritage and natural beauty and represent both a challenge and an opportunity within the real estate market.

When these factors are considered together—aging housing stock, overcrowding, and broader socio-economic conditions that have contributed to high vacancy levels—it becomes clear why the situation can appear concerning to prospective buyers and investors.

Some hesitation is therefore understandable when assessing Portugal as an investment destination.

However, despite these challenges, Portugal remains a highly attractive and resilient real estate market.

The key lies in identifying the right opportunities. While navigating the market can feel daunting, particularly for those wishing to avoid costly renovations or unforeseen structural issues, there are reliable alternatives.

Carefully selected, renovated, and professionally inspected properties offer a secure path forward.

Exploring such options allows investors and homebuyers to benefit from Portugal’s strong long-term potential while minimising risk and ensuring peace of mind.

In response to the country’s housing challenges, HP Invest, part of the Harland & Poston Group, is taking a proactive role in delivering high-quality, well-managed construction and development solutions.

To support this commitment, HP Invest operates with an integrated, end-to-end approach to real estate investment and development, overseeing projects from initial concept through to delivery. The firm focuses on creating long-term value through carefully managed developments across a broad range of asset classes, including land acquisition and development, residential projects such as apartments, townhouses, and villas, and selected commercial and hospitality assets.

HP Invest brings together a multidisciplinary team of experienced professionals, working across development strategy, construction management, architecture, planning, and design. This integrated structure ensures that every project benefits from rigorous oversight, high construction standards, and a long-term investment mindset—delivering quality, compliance, and sustainable value across the portfolio.

But don’t take our word for it: the results speak for themselves. We invite you to explore Olarias Residential Development, a recently completed development that reflects HP Invest’s standards, expertise, and commitment to excellence.

Driven by professional expertise, a once-neglected property in the heart of Lisbon has been successfully transformed into a modern, high-quality home. Previously inadequate for modern living, with peeling walls, draughts, and leaks, the apartment underwent a complete refurbishment from the ground up, using only premium materials and construction standards.

Every detail was carefully considered to enhance both architectural design and long-term liveability while preserving historic characteristics, ensuring lasting comfort for future residents.

The redevelopment delivered a contemporary residential apartment in the heart of Lisbon, seamlessly blending modern functionality with architectural heritage and offering modern residential standards in a historic setting.

To discover more about HP Invest’s completed developments, investment approach, and fully managed process—from concept design through to key handover—we invite you to explore their portfolio or contact their expert team directly.