The Market Seen From the Street: Senior Housing in Portugal
Senior Housing in Portugal
1. Introduction
Demographic aging is one of the major social and economic challenges of the 21st century and Portugal stands out as one of the European countries most affected by this transformation. Currently, about 23% of the Portuguese population is over 65 years old and projections indicate that this percentage will continue to increase in the coming decades. This phenomenon puts increasing pressure on social services, healthcare systems, and, more evidently, on the housing sector.
As the population ages, new housing demands arise that go beyond accommodation. Quality of life, autonomy and well-being are becoming priorities, driving the development of solutions that integrate comfort, accessibility, and specialized support. In this context, the concept of Senior Housing becomes relevant: an innovative housing model that combines independence and safety with a range of personalized services, ensuring active and dignified aging.
Despite growing demand and the evolution of Portuguese senior adults, Portugal still faces a significant shortage of adequate supply, especially when compared to other European countries that have already adopted more diversified and flexible models. This article analyzes the reality of senior housing in the country, exploring the main trends, challenges, and opportunities that may shape the future of this housing segment.
2. Population Aging - A New Demographic Challenge
Portugal is experiencing one of the greatest demographic transitions in its history. According to data from INE, more than 23% of the Portuguese population is now over 65 years old — a percentage expected to exceed 35% by 2050, placing the country among the oldest in Europe. In comparison, the European Union average is currently 21.3% and is projected to reach 30.5% by 2050, according to Eurostat data from 2023.
Life expectancy has significantly increased in recent decades, currently standing at 81.1 years (84 years for women and 78 for men) in Portugal, compared to the EU's 80.1. Forecasts suggest that the country's life expectancy could rise to 86 years by 2050. Portugal is above the European average and is aging faster. While these figures are positive, they imply the need of a profound adaptation of infrastructures and social services, particularly in the housing sector.
On the other hand, the aging index (number of elderly per 100 young people) is already over 190, significantly higher than the European average of 138, reflecting a growing gap between the active and senior populations. This reality is not evenly distributed: regions like Alentejo, Central, and Interior North have the highest ratios (aging index over 250), while Algarve and the Lisbon Metropolitan Area attract more foreign and national seniors seeking quality of life and access to services.
About 90% of Portuguese people over 65 live in their own homes, emphasizing the preference for autonomy. However, aging brings new challenges: more than 35% of the population aged 80+ faces some degree of dependency, reflecting the growing demand for intermediate residential solutions that combine privacy, assistance, and well-being.
Moreover, the profile of seniors is changing. The concept of active aging — promoted by the WHO — is gaining ground, representing a more demanding, informed, and technologically adept generation. Currently, over 60% of Portuguese seniors regularly use the internet, influencing their expectations regarding housing, services, and information access.
Portugal is also increasingly sought after by international seniors. In 2023, more than 47,000 foreigners aged 65 or older legally resided in the country, particularly from the UK, France, the Netherlands, and Germany — attracted by the climate, safety, healthcare system, and fiscal regime (like the former non-habitual residents' status). This trend directly impacts the demand for quality senior living, especially in coastal regions. In the Algarve, for example, foreign residents aged 65+ account for nearly 20% of the region's total senior population.
3. Senior Housing vs. ERPI
The concept of Senior Housing refers to a set of residential solutions designed for people aged 60 or over, who seek to maintain their independence and quality of life, while also valuing some level of support and integrated services. This housing type focuses on autonomy and well-being, offering optional services such as medical support, recreational activities and personalized assistance. The facilities are adapted to ensure accessibility and safety, including assisted residences, senior communities, cohousing, and private care homes. Generally promoted by the private sector, senior housing primarily targets active seniors or those with low dependency, integrating social and cultural activities that promote active aging.
On the other hand, Residential Structures for Elderly People (ERPI) are social facilities intended for elderly people who require permanent care or daily assistance. Governed by specific legislation, these structures must meet strict requirements set by Social Security, ensuring accommodation, continued care and daily support. Services provided include medical care, nursing, meals and leisure activities, with facilities specially adapted for seniors with low autonomy. ERPIs can be managed by public entities, Private Social Solidarity Institutions (IPSS) or private entities, but are always subject to state regulation. Access to this type of accommodation often depends on social and economic criteria, with common state support or family contributions.
The main difference between the two approaches lies in the residents' profile and service management. Senior Housing, predominantly privately managed, is more flexible and oriented towards seniors' autonomy, offering independent living with personalized services. In contrast, ERPIs, subject to strict regulation, are intended for seniors with reduced autonomy, providing continuous care and daily support. This distinction reflects the specific needs of seniors and how infrastructures are organized to respond to different levels of dependency.
4. Characterization of Supply
Despite the accelerated aging of the Portuguese population and the evolving senior profile, the supply of senior housing in Portugal remains dominated by conventional models, which prove insufficient to meet current and future demand.
The residential support system for seniors in Portugal has historically been centered on nursing homes, with a strong presence of the charitable and religious sector (IPSS and Santa Casa da Misericórdia), representing more than 80% of the total supply. The remaining 20% is divided between public units (limited in number) and private units (which are growing).
These facilities are mainly designed for seniors with moderate or high levels of dependency, operating within an institutionalized model and often having waiting lists exceeding a year, particularly in urban areas.
According to Eurostat and Social Charter data, Portugal currently has around 100,000 beds in nursing homes and residential structures for the elderly (ERPI) — which corresponds to approximately 500 beds per 100,000 inhabitants over 65 years old. In comparison, the Netherlands, Sweden, or Germany have already surpassed 1,200 beds per 100,000 seniors, with more diversified and flexible models.
Currently, about 30,000 to 40,000 additional beds are needed to meet current demand. This structural deficit becomes more severe considering demographic projections for the coming decades and the increasing number of autonomous seniors seeking intermediate solutions.
Portugal also shows a clear gap in the supply of residential solutions for autonomous seniors or those without severe dependency, such as assisted living residences, apartments with shared services, or senior co-housing. Although growing in other European countries, these solutions represent a very small portion of the market in Portugal, with fewer than 3,000 beds in such structures.
Geographically, most private senior housing supply is concentrated in the metropolitan areas of Lisbon and Porto, as well as Algarve, where there is greater attractiveness for foreign investors and a higher presence of international seniors.
However, those regions with a high aging index still face a significant supply deficit, creating opportunities for proximity models adapted to local scale.
5. Challenges of Senior Housing in Portugal
The development of senior housing solutions in Portugal faces a series of structural, economic, social, and even cultural challenges. These obstacles compromise the market's ability to adequately respond to the new demands of an aging population and attract qualified investment.
As previously discussed, the shortage of supply and the lack of intermediate residential models (such as assisted living and senior living communities) make the market highly dependent on traditional nursing homes, which, in general, do not meet the expectations of an increasingly active and demanding generation. However, other issues contribute to exacerbating this situation.
The cost of existing solutions, particularly in the private sector, makes senior housing unaffordable for most Portuguese retirees. With average pensions below 800 euros per month, most private care homes — charging between 1,500 and 3,000 euros per month — are economically out of reach for many seniors. The lack of significant state support and tax incentives for developing innovative housing models perpetuates this scenario.
As seen throughout the real estate market, this segment also faces bureaucratic and regulatory barriers. Senior housing projects in Portugal encounter complex administrative procedures and lengthy licensing processes, particularly when involving healthcare services. The lack of a clear legal framework for hybrid models, such as cohousing or senior coliving, makes the process even more challenging. It might be beneficial to include senior housing as an autonomous typology within the Urbanization and Building Legal Regime (RJUE).
The Licensing Regime for Residential Structures for Elderly People (ERPI) does not accommodate flexible formats, leading developers to choose conventional models to ensure project viability, which do not fit seniors' needs.
Moreover, there is a stigma associated with nursing homes, seen as a last resort rather than a place of quality of life and well-being. This perception discourages demand and hinders the acceptance of new residential formats.
Lastly, one of the major obstacles to the sustainable development of the sector is the lack of skilled professionals. Portugal faces a significant shortage of caregivers, geriatric nurses, and home care professionals, due to low wage attractiveness and undervalued working conditions.
According to OECD data, Portugal has one of the lowest ratios in Europe of formal caregivers per 1,000 seniors, resulting in an overload on existing professionals and impacting the quality of services provided. To mitigate this issue, it is essential to invest in ongoing specialized professional training, improve salary and working conditions, and create financial and tax incentives to attract more professionals to the sector.
6. The Impact of ESG Criteria on Senior Housing
The concept of ESG (Environmental, Social, and Governance) has been gaining increasing relevance in the real estate sector, and Senior Housing is no exception. Integrating ESG practices into Senior Housing projects represents not only an opportunity to promote active and sustainable aging but also a strategic path to ensure the attractiveness of investments.
From an environmental perspective, the development of senior housing units should consider criteria such as energy efficiency, the use of sustainable materials, and responsible resource management. Well-insulated buildings, efficient heating systems, and the use of renewable energy sources not only reduce operational costs but also contribute to a healthier and more comfortable environment for residents.
On the social front, the positive impact lies in creating spaces that promote social interaction and well-being, reducing senior isolation and encouraging community life. Senior co-housing models, for instance, have proven effective in creating mutual support networks, improving residents' quality of life. Additionally, ensuring accessibility is essential to meet the needs of an aging population.
Regarding governance, transparency in management and the adoption of good conduct policies are essential to building trust among investors, residents, and families. Clear communication mechanisms, as well as strict compliance with legal and health standards, are central elements to ensuring project sustainability.
Adopting ESG criteria in senior housing not only contributes to creating more responsible infrastructures but also increases attractiveness among institutional and private investors who value assets with positive social impact and lower reputational risk. Therefore, the future of senior housing in Portugal should be based on an approach that combines innovation with social and environmental responsibility.
7. Good examples internationally: Innovation in Senior Housing
The challenge of population aging is not unique to Portugal. The Netherlands, Germany, and Denmark have been facing this reality for a longer time and have developed innovative and effective senior housing models that combine quality of life, autonomy, and economic sustainability.
The Netherlands is considered a pioneering example in senior housing. Hundreds of senior co-housing communities have been established, where residents live in individual apartments but share common spaces and make community decisions. One of the most emblematic cases is the Humanitas model in Rotterdam, globally recognized for integrating university students into their facilities — students live for free in exchange for providing support and spending time with senior residents. This approach promotes autonomy and fosters a strong community bond, bringing younger and older generations closer together.
Furthermore, many of these projects are funded by housing cooperatives with support and incentives from local authorities — demonstrating that public-private investment with social impact is possible.
In Germany, the model of assisted living with optional services is a reality, with thousands of units in operation. This hybrid model combines traditional nursing home elements with independent living, where residents maintain autonomy while having access to a wide range of services (cleaning, meals, nursing, transportation, cultural activities, or physical therapy).
This model respects seniors' desire for independence while ensuring support when needed. It also attracts private investment by ensuring long-term contracts, stable occupancy rates (often above 90%), and a controlled risk profile, making it appealing to investors.
In Portugal, since the supply of intermediate solutions is almost non-existent, adapting this model, particularly in large urban centers and metropolitan areas, could be highly beneficial.
Finally, Denmark approaches senior housing as an integral part of urban planning and social cohesion policy. A successful example is the so-called "Senior Villages" — small-scale housing projects integrated into urban or suburban areas, focusing on environmental sustainability and creating community links by prioritizing proximity to services, shops, and public transport. These models are managed by cooperatives or municipalities, ensuring fair pricing and long-term planning.
What can be learned from these international best practices is that Portugal can (and should) invest in diversifying the supply and attracting investment, so that the senior population does not solely rely on state assistance. Promoting cooperation between the public sector, private sector, and civil society is essential.
Conclusion
The senior housing market in Portugal is at a pivotal moment, driven by rapid population aging and profound changes in seniors' expectations regarding lifestyle and well-being. Despite some progress, the current supply remains insufficient and lacks diversity, especially concerning intermediate solutions that combine autonomy with personalized support.
International experiences show that it is possible to adopt more flexible housing models that are community-integrated and sustainable, simultaneously promoting quality of life and social inclusion for the elderly. To achieve this, it is essential for the public and private sectors to encourage the creation of innovative projects, investing in incentive policies and regulations that favor modern approaches tailored to new needs.
Additionally, integrating ESG criteria into senior housing project development represents an opportunity to align real estate investments with socially responsible and environmentally sustainable practices, increasingly valued by investors and essential for securing funding.
Only in this way will it be possible to ensure a more dignified and inclusive future for an increasingly aging population, offering a true home where autonomy and the concept of community coexist harmoniously.
The path to senior housing in Portugal therefore involves innovation, cooperation between public and private actors, and the adoption of practices that promote sustainability and quality of life. It is an unavoidable challenge that demands strategic vision and social commitment so that our senior population can age with dignity and security.
