More immigration, more international buyers, job growth, and, for a long time, favourable financing conditions helped pressure the market. But there is now a question that deserves attention: what if demand slows down and houses remain too expensive?

It is precisely this possibility that a recent study by Morningstar DBRS puts on the table. Since 2019, house prices have practically doubled in Portugal and increased by 19% in 2025 alone. At the same time, the country has accumulated, since 2014, a deficit of more than 300 thousand dwellings, when comparing the formation of new households with the number of completed houses.

In the coming years, some of the factors that drove demand may lose strength. Immigration may slow down, access to credit has become more demanding, interest rates are higher and prices themselves have already distanced many families from the possibility of buying a house. In theory, a reduction in demand should relieve pressure on prices. But real estate does not work so simply.

Portugal continues to have a lack of construction workers, high costs, scarcity of land prepared for building and too slow planning and licensing processes. A reduction in demand does not create a single new home. A family that stops buying because it cannot get financing does not stop needing housing. It probably moves to the rental market, increasing the pressure on another segment that also suffers from a lack of supply.

The DBRS study also contains a signal that deserves attention: almost two-fifths of the recent rise in prices in Portugal are not explained by the economic fundamentals considered in its model. The agency considers it premature to talk about a real estate bubble and underlines an important difference compared to the last crisis: Portuguese families are now much less indebted.

We do not, therefore, need alarmism, but we do need realism. And perhaps we, professionals in the sector, should also make some self-criticism. For too long, we have celebrated each new price record as an automatic proof of market strength. I myself recognise that it is easy to look at the appreciation, the increase in transactions and international demand as positive signs. And they are in many ways. But a market where a growing part of the population cannot afford to buy or rent a house cannot be considered healthy just because prices continue to rise.

Portugal may have fewer buyers, more expensive credit and lower growth in demand. But as long as there are still few houses, blocked land, slow permitting and insufficient construction, accessibility is unlikely to return on its own.

The market may cool down. The problem is that the housing crisis may remain hot.