New support measures for home loans foresee stabilization of interest rates

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The Minister of Housing, Marina Gonçalves, explained today that the new measures for families with housing loans include extending existing support and stabilizing interest rates on contracts.

“What we’re going to announce has two areas of action. On the one hand, strengthening the support we had already created, so we can extend it and make it more effective for families and, on the other hand, an attempt to stabilize interest rates on mortgage contracts,” she told reporters.

On Wednesday, Prime Minister António Costa said that the government was waiting for the European Central Bank’s (ECB) decision on interest rates before approving, in the Council of Ministers next week, measures to support families with housing loans.

Marina Gonçalves
Marina Gonçalves

Meanwhile, the ECB announced a further rise of 25 basis points in its three key interest rates. This was the tenth consecutive interest rate hike by the central bank, which has increased interest rates by 450 basis points since July last year, the fastest rate hike cycle in the history of the eurozone.

On the sidelines of a visit to a housing complex being built in Paredes, in the district of Porto, to rehouse around two dozen families from a community living in shacks, the Housing Minister said that “these are the two focuses” the government is working on.

“Next week, once the bills have been approved and discussed, we’ll be in a better position to present each measure in detail,” he added.

Asked, however, about possible measures the government could take to prevent rents from rising in 2024, Marina Gonçalves said that various scenarios are being studied.

“What we want to do is listen to the various parties involved,” he said, noting that there will be a series of meetings on the matter next week.

“We’re calling together the various entities in the sector to listen to their concerns and figure out possible solutions so that we can work on them together,” he said.

The minister also pointed out that other support is already in place to help families.

“Rent support was the most immediate. We have a set of more immediate instruments to respond to families and rent support was the most immediate to respond to the current rental market.”

Pointing out that there are currently 185,000 families in the country receiving rent support, he noted that, at the moment, families with an effort rate above 100% are being recalculated.

“It’s an ongoing job, we need to fine-tune the law to make it more effective in the face of the existing problem,” he added.

Marina Gonçalves believes that there is no correlation between the sharp increase in rents that has been observed in recent months and the Mais Habitação program that the government is proposing to implement.

“The increase is something that is happening all over Europe. There is no direct correlation between Mais Habitação and the increase in rents. This price increase was already evident in January and February,” he noted.

The minister considered the Mais Habitação (More Housing) measures, vetoed by the President of the Republic, Marcelo Rebelo de Sousa, and which the PS has already announced it will confirm in the Assembly of the Republic, to be “important” because “they can help stabilize rental prices.

He concluded: “The rental market has a set of rules that are applied. It works and we are building a set of instruments to make it compatible with the population. That’s what Mais habitação is all about. It’s an attempt to give confidence to the market and at the same time find these answers for families who don’t have access to housing.”

Iris Lavan
Iris Lavanhttps://irislavan.com/en/
With a background as a consultant in the medical industry, Iris Lavan brings a wealth of knowledge and expertise to Portugal Pulse. Iris also runs a company in Tel Aviv offering marketing, business development, content creation and public relations services. She holds a degree in economics and management, giving her a solid grounding in business strategy and financial planning. Iris' commitment to Portugal Pulse is reflected not only in her consulting career, but also in her impact on the Portugale media landscape in Israel. She was an interviewer for Hadshot Portugal חדשות פורטוגל, a media outlet that broadcasts news about Portugal in Hebrew, where she provided valuable information on current affairs, healthcare and the economy. Since July 2023, Iris has also been part of the Portugal Pulse team.

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