Lisbon

Lisbon’s housing market remains highly dynamic and expensive. Roughly 47% of households rent their homes, while the home ownership rate in Lisbon is approximately 53%. The city continues to experience a housing shortage, leading to rising prices. As of mid-2025, the median price to buy an apartment in Lisbon is around 4,620 euros per square metre, while the median monthly rent is about 16 euros per square metre. Demand for rentals, especially among young professionals and international residents, remains strong.

Publicly owned housing in Lisbon is primarily intended for low- and medium-income residents. Recent municipal strategies include a six-year, 800-million-euro investment plan to renovate and expand affordable and publicly owned housing. Despite new policies, public/social housing remains limited, representing about 8-10% of the housing stock—significantly lower than many other European capitals.

In Lisbon, public housing (housing owned or managed by the municipality) often overlaps with social housing (subsidised accommodation for those with low incomes or in precarious circumstances), but the terms are not strictly synonymous. Publicly owned housing can include affordable lease schemes targeting broader groups, while social housing is strictly for vulnerable populations.

Rising property values, stagnant local incomes, and insufficient affordable/public housing mean Lisbon continues to struggle with affordability for many residents, although ongoing municipal investments seek to address these challenges.

Lisbon’s housing crisis is marked by soaring property prices and rents, outpacing most of Europe. Housing prices in Portugal have risen by over 120% since 2015, and in the first quarter of 2025 alone, prices in Lisbon jumped by more than 16%. Supply remains constrained as new housing construction in Lisbon is actually falling, intensifying shortages and escalating both rental and purchase costs. Approximately 15% of existing homes in Lisbon are vacant, further limiting market availability.

Demand is fueled by a surge of young professionals, expats, and digital nomads drawn by the city’s tech sector and quality of life, putting additional pressure on limited rental stock. Rents have increased sharply, with an 8% jump in 2023. Home seekers, especially renters, experience acute difficulty: many spend over 80% of their income on rent, and there are growing reports of people living in precarious or improvised accommodation, including abandoned buildings or converted containers.

Those most affected include low- and middle-income residents, the elderly on fixed pensions, young adults, and service workers, many of whom are unable to afford even basic housing. The shift of many properties to short-term holiday lets and high investor interest in more profitable segments further diminishes access for locals. The crisis is also linked with a rising number of evictions, homelessness, and worsening social exclusion in Lisbon.

Lisbon’s city administration addresses affordable and sustainable housing with an ambitious, multi-faceted plan rooted in significant public investment and concrete targets. The current €800 million strategy for 2022–2028 aims to deliver 13,000 new or renovated homes in Lisbon by mid-2025, contributing to a broader goal of up to 26,000 more homes by 2026 and 59,000 affordable units nationwide by 2030. Recent programs focus on renovating vacant flats (2,000 units in 11 boroughs), constructing and refurbishing over 1,500 homes for low- and middle-income residents, and purchasing properties at market value to be rented affordably.

Key activities include the Affordable Rent Programme (for households earning €10,640–€17,220 annually), housing subsidies ensuring no one pays more than 30% of income in rent, and streamlined digital licensing processes for faster project approvals. The city supports cooperative housing by granting land for citizen-led development and is piloting 90-year municipal land leases for private affordable housing projects. Restrictions on new short-term rental licenses in over 19 neighborhoods further protect the housing stock for residents. National schemes like the 1st Right Program support vulnerable households, while large urban regeneration projects such as Parque Cidades do Tejo are set to add thousands of sustainable homes integrating green planning principles.

In Lisbon, housing cooperatives have a marginal but recently revitalized presence in the housing market. After a gap of over 25 years, the city’s administration relaunched the cooperative housing sector with the Cooperativas 1.ª Habitação Lisboa program. This initiative grants municipal land to cooperative groups through 90-year surface rights, enabling members (especially young and middle-income families) to access homes at construction cost. The model is designed for small-scale developments, typically between 12 and 23 units per project, with a target of approximately 500 cooperative homes under the current program. Major locations include Lumiar, Benfica, Arroios, São Vicente, and Santa Clara.

Despite these developments, cooperative housing remains limited—accounting for only a tiny fraction of Lisbon’s total housing stock (far below 1%). The main growth dynamic is linked to new city-sponsored land grants, improved regulatory processes, and planned financing lines, although sector expansion is constrained by legacy gaps in policy support and bank financing. The city’s housing policy now explicitly includes cooperatives as a means to rebuild resident stability and affordability. Regulatory supports also include possible tax incentives and integration with national cost-controlled housing programs. However, the sector is still in its early stages of renewed growth, with most projects currently in development rather than completed.