As Europe pivots towards a greener, more energy-efficient future, Germany is setting the pace in construction with a decisive shift from new builds to sustainable building modernization. According to a recent market study by Heinze Marktforschung, nearly two-thirds of all construction activity in Germany is now dedicated to refurbishment and energy-efficient upgrades rather than new developments. The main drivers? Insulation, windows, photovoltaic systems, and modern heating technologies.

This shift is not just a local trend. It is a glimpse into the future of real estate and construction across Europe, and Portugal should take note. With an extensive stock of ageing, energy-inefficient buildings, the Portuguese market has both a pressing need and a unique opportunity to follow suit.

That message resonated strongly at the Portuguese Real Estate Show this week in Lisbon, where numerous panel discussions focused on the need to transition from building new to upgrading the old. The consensus was clear: retrofitting existing buildings is not just a sustainability imperative; it is a market necessity.

Portugal’s urban fabric, especially in cities like Lisbon and Porto, is filled with beautiful but outdated buildings. While these properties hold cultural and historical value, they are often plagued by poor insulation, outdated heating systems, and inefficient energy consumption. Unlike Germany, where large-scale data is now informing precise investment in sustainable products, Portugal is still taking early steps in creating a structured, data-backed approach to energy-efficient refurbishment.

The lessons from Germany's market are critical. In 2023 alone, approximately €11 billion was invested in thermal insulation, with the residential sector accounting for 67% of that total. These numbers underline a profound change in market priorities, one where the bulk of investment is no longer in expansion but in transformation.

For Portugal, the economic opportunity is immense. Developers, product manufacturers, and service providers who shift their strategy toward sustainable renovation will likely gain a competitive edge in the coming years. The demand is already here, from homeowners seeking lower energy bills to municipalities aligning with EU energy directives and ESG targets.

Moreover, the broader shift supports long-term resilience in the industry. New builds are increasingly constrained by land scarcity, rising costs, and complex permitting processes. By contrast, retrofitting unlocks value in existing structures and promotes a circular economic approach to construction and reducing waste, emissions, and resource consumption.

But capitalizing on this trend requires more than good intentions. As seen in the German study, success depends on access to accurate data, a clear understanding of regional building types, and targeted product innovation across at least twenty categories, from façades to smart heating systems.

Portugal stands at a critical juncture. By embracing modernization as the future of real estate, the country can simultaneously boost sustainability, preserve architectural heritage, and ignite a new era of growth in the construction sector.

In short, the next important thing in Portuguese real estate is not a skyline of new towers—it is the reinvention of what is already standing. The future is not about building more; it is about building better.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes