Can more housing supply improve affordability? A subnational perspective from Portugal

Diogo Ribeiro, Hugo de Almeida Vilares and Luís Carvalho

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We investigate the impact of housing supply on affordability in rapidly appreciating subnational markets in Portugal. Our spatial econometric model confirms a negative relation between housing stock and prices, yet predicts that, on average, maintaining the construction pace of the 2000s would lower prices by only 3%, while doubling it would bring a 6% reduction. We also find significant price impacts from short-term rentals and international demand. Simulations indicate that a policy mix combining moderate supply growth with sensible limitations in those domains could more effectively alleviate affordability pressures in high-demand regions, bringing spatial nuance to the ‘supply scepticism’ debate.

Keywords: housing affordability; supply scepticism; short-term rentals; tourism; spatial spillovers (search for similar items in EconPapers)
JEL-codes: R21 R23 R31 R38 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2025-12-10
New Economics Papers: this item is included in nep-geo
References: Add references at CitEc
Citations:

Published in Regional Studies, 10, December, 2025, 59(1). ISSN: 0034-3404

Downloads: (external link)
http://eprints.lse.ac.uk/130587/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:130587

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().