Banco de Portugal study finds housing supply shapes the effect of extra demand
New central-bank research estimates that a 1% demand shock raises house prices by 0.69% and rents by 0.37%, with stronger effects where supply responds slowly.
Archived after its publication day. Search retains this original briefing for background and accountability.
Archived 12 September 2026The estimates describe average market relationships, not a forecast for one home. They support checking local supply and planning constraints before assuming demand-side support will make housing more affordable.
- The study finds larger price and rent effects in municipalities with less responsive housing supply.
- Lisbon and Porto are highlighted as places where supply adjusts less readily than in smaller municipalities.
- A model estimate cannot set the fair price or rent of a specific property.
Supply conditions change the outcome
The research separates a change in demand from the ability of housing supply to respond. Where new supply is constrained, more purchasing power can feed more strongly into prices and rents instead of producing enough additional homes.
The reported percentages are econometric estimates across data and periods. They are not a promise that the next 1% change in demand will produce exactly the same result everywhere.
Use neighbourhood evidence for a personal decision
Compare completed transactions or reliable local rent evidence, building pipeline, condition, transport and carrying costs. National policy findings cannot replace a survey, contract review or affordability test.
A buyer should stress-test financing; a renter should compare the full tenancy cost and legal terms. Neither should treat a national average as a valuation.
What you can do now.
- 01
Check local supply and transaction evidence.
- 02
Stress-test the full housing budget.
- 03
Use the study for policy context, not an individual valuation.
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