Portugal needs to build more houses. But who is going to build them

Portugal has spent the last few years discussing the need to build more housing. The diagnosis is relatively consensual. We need to increase supply, speed up licensing, make land available and create conditions for private and public investment to respond to market needs. But there is one question that continues to receive less attention than it should: who is going to build all those houses?

By Paulo Lopes, in Housing · 01 Nov 2026, 17:01 · 0 Comments

The approval of a project does not mean that there is capacity to carry it out, just as the availability of financing does not guarantee that there are enough companies, workers and resources to transform the investment into completed housing. We may be focusing much of the debate on the obstacles that prevent construction from starting, without sufficiently discussing the limitations that may prevent construction from happening.

The Portuguese construction industry faces challenges that cannot be solved only with an increase in demand. The shortage of skilled workers, the ageing of part of the workforce, the difficulty in attracting new generations and the fragmentation of the business fabric condition the sector's growth capacity. Many companies have structures sized for certain volumes of activity and are unable to quickly increase their production without compromising costs, deadlines or quality. Unlike other industries, where investment in equipment and processes allows for a significant increase in production capacity, construction continues to depend on a multiplicity of teams and specialities that need to work in a coordinated manner on each project. Therefore, increasing the number of licensed projects is indispensable, but it does not necessarily mean increasing the number of houses delivered to the market in the same proportion.

The signals coming from Germany help to understand the importance of this transformation. According to a recent study by Heinze Marktforschung, permits for prefabricated housing in multifamily buildings increased by 52.1% in the first half of 2026, while conventional construction registered a growth of 11.7%. These figures do not demonstrate that industrialisation is a universal solution, but they do reveal that production models that are less dependent on full execution on construction sites are beginning to gain importance. For Portugal, the issue should not only be to import new construction techniques, but to create conditions to modernise an industry that needs greater scale, better organisation and capacity to attract qualified professionals. Prefabrication, modular production, digitisation of processes and collaboration between companies can help overcome some limitations, as long as they are accompanied by investment, training and continuity of orders.

There is also an economic dimension that rarely enters into this discussion. When the productive capacity of a sector is limited, a significant increase in demand can translate into additional pressure on prices, rather than immediately generating more supply. If Portugal accelerates permitting and mobilises investment for thousands of new homes, but fails to increase execution capacity at the same time, it risks facing higher construction costs, delays and difficulties in implementing projects. This means that an effective housing policy cannot be limited to stimulating construction demand. It also needs to create conditions to develop the supply of building capacity, through professional qualification, business modernisation, industrialisation and greater predictability of investment programmes. Without this concern, part of the solutions aimed at improving access to housing may end up encountering new obstacles precisely at the stage when it should produce results.

Portugal does need to build more houses, but it also needs to recognise that construction is an economic activity with production limitations, investment needs and organisational challenges. The future of the housing market will not only depend on the decisions made in urban planning offices, financial institutions or real estate development companies. It will also depend on the capacity of construction companies to carry out projects, the availability of qualified professionals and the evolution of the methods used. Perhaps it is time to add a new dimension to the debate on housing: it is not enough to ask how many houses we want to build, where we can build them or how we are going to finance them.

We also need to ask who is going to build them and whether we are preparing the industry to meet that challenge.