The increase in house prices in Portugal stood out among various European Union (EU) countries in the second quarter of this year, according to data released by Eurostat this Friday.
Portugal recorded the largest increase both year-on-year and sequentially, reported the EU’s statistical office.
The Eurostat report notes that “the largest increases were recorded in Portugal (+17.2%), Bulgaria (+15.5%), and Hungary (+15.1%)” compared to the same period last year.
Sequentially, or compared to the previous month, “the largest increases were recorded in Portugal (+4.7%), Luxembourg (+4.5%), and Croatia (+4.4%).”
House prices rose 5.1% in the euro area and 5.4% in the EU in the second quarter compared to the same period last year, with Portugal experiencing the largest increase at 17.2%.
In sequential variation, the indicator grew by 1.6% and 1.7%, respectively.
Affordable Housing? Brussels Urges EU Countries to Provide State Aid
The European Commission is encouraging EU countries to support their economies by boosting affordable housing through a relaxation of state aid rules, exempting them from notification requirements.
“The European Commission has today launched a public consultation on the revision of state aid rules to help Member States access affordable housing. This revision will address challenges related to housing affordability, extending beyond social housing,” the institution stated in a communiqué.
Explaining that “the goal is to allow EU countries to support affordable housing more quickly and simply,” the Commission proposes the creation of a new category “allowing the granting of state aid without needing to notify the Commission.”
This new definition focuses on “housing for households that cannot access affordable housing due to market conditions and, in particular, market failures,” it further noted.
The public consultation is open until November 4 on the European Commission’s website.
The current rules allow Member States to support access to housing, particularly social housing for the most disadvantaged, without compensation limits.
However, these rules do not cover current realities as the crisis affects more segments of society.
EU state aid rules govern how countries can provide financial support to businesses and economic sectors, ensuring that such aid does not distort competition in the internal market through excessive public subsidies and maintaining a level playing field.
Exceptions exist, especially in situations of public interest.
The European Commission is responsible for overseeing and authorizing such aid.
Due to the acute housing crisis in the EU, the European Commission plans to introduce a European Affordable Housing Plan by the end of 2025, aimed at complementing housing policies at the national, regional, and local level while upholding the principle of subsidiarity, as this is a Member State competence.
The Commission recognizes the challenges related to the housing crisis in Portugal and aims to address them with this plan, anticipated for this year, including funding, state aid, and limits on local accommodation.
The Commission is looking to allocate more EU funds, such as cohesion or the long-term budget, to affordable housing, as well as reviewing state aid rules for housing projects and regulations concerning tourist rentals.
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’ homes at or after the age of 30 because they cannot afford their own housing.
In 2023, about one in ten Europeans spent 40% or more of their income on housing and related costs.
The European Union is facing a housing crisis, in countries like Portugal, where house prices and rents have risen significantly, making affordable housing increasingly difficult to obtain, especially for young people and low-income families.
