Government aid for young people looking to buy their first home is increasing demand and contributing to rising house prices in Portugal, warns financial rating agency DBRS, according to idealista.

The measure that allows 100 percent of the value of a property to be financed may indeed reduce “generational inequalities”, but, quoted by Jornal de Negócios, DBRS says that it “puts additional pressure on house prices” at a time when there is an imbalance between supply and demand.

Although the public guarantee allows for the exemption of certain taxes, such as the exemption of IMT and Stamp Duty, DBRS says that the measures are limited and that the effects will not be noticed immediately. The agency emphasises that the true impact of the policies will only be assessed in the medium term.

DBRS predicts that housing prices will continue to rise in 2025 but at a slower pace due, among other things, to a lack of new construction and increased interest from foreign investors.

According to DBRS, cited by idealista, access to housing has become increasingly precarious, as house prices are rising steeply without keeping pace with the income of potential buyers.