The desire to build homes in Portugal exists among real estate developers. But they face many challenges today, from a lack of labor to high taxes and bureaucracy, which ultimately hinder projects—especially affordable housing. “It’s becoming increasingly difficult to build. Older generations used to build faster and better. (…) What used to be done in a day now takes two or three. And that’s reflected in the cost of construction, which has increased,” explain António Machado and Georgi ZacZac, partners at the real estate developer Invicta Park, in an interview with idealista/news.

At a time when the housing crisis is glaring, Invicta Park has built around 200 homes in the past two years, all in the north of the country. “We have luxury housing and around 80 apartments aimed at the middle class in two developments, The Park in Madalena and The Park in Canelas,” says António Machado, adding, however, that building affordable housing is not in their plans, “because the numbers don’t add up.” “Today, there’s no investor who can build affordable housing,” he stresses.

For Georgi ZacZac, “the only way to solve this problem is to build upwards, build tall buildings,” because construction becomes cheaper and takes up less space. Moreover, regardless of the new government resulting from the May 18, 2025, legislative elections, “the only thing we, developers, would like to have is very clear rules,” says the Brazilian businessman. Thus, building upwards, clarifying laws, and speeding up bureaucracy are three key aspects the Invicta Park partners consider crucial to making housing construction more attractive and affordable—thereby increasing housing supply and lowering prices—as they explain in this joint interview with idealista/news.

VAT on housing construction

Invicta Park defines itself as an “alternative investment house.” What does that mean?

Georgi ZacZac (GZ): Alternative investment is non-traditional. It’s not about buying land and building. It’s about identifying a building and converting it, giving new life to something that already existed—an alternative approach.

What is your role in the real estate market? Do you focus more on rehabilitation or new construction?

António Machado (AM): We do both. Sometimes we prefer rehabilitation because it’s quicker in terms of licensing, but it depends on the opportunity, market demand, and logistics. When rehabilitating, there’s also the advantage of using less steel, contributing to the planet’s sustainability. But we also do new builds—buying land and handling licensing.

“In Portugal, something that often discourages investors is bureaucracy.” – António Machado

Is diversifying investments in housing, logistics, and hospitality a winning strategy? Why? Do you focus only in the North or in other parts of the country too?

GZ: Because it’s possible in Portugal. You can drive across the country in 6–7 hours. If we only focused on one asset type, we’d miss out on others nearby. Our focus has always been the North and will continue to be. Every business is specific. We always look for the best return within those specifics.

AM: All real estate segments are good businesses—residential buildings, logistics assets—it depends on opportunity, location, and construction time. In Portugal, bureaucracy often discourages investors. Having an approved project is one thing. Buying land and needing architectural projects and licensing is another. Time is fundamental and often determines which project we choose.

Luxury housing in Porto

Was time the deciding factor in transforming the old BPI headquarters into Arthouse Boavista? Why choose housing over other uses?

AM: Location—it’s prime. The building could have had various uses. Initially, it was presented as a services project, continuing its original use. But we wanted to bet on a different concept since it’s in a luxury residential area.

How is Arthouse Boavista progressing and what’s the associated investment? How many homes have been sold? What do families look for in these luxury homes?

GZ: The project has been successful and highly sought after. It’s innovative due to the services offered—various amenities. It’s the first building in Porto with a concierge and 24-hour security. It’s dedicated to the arts; the idea is for families to feel like they’re living in an art gallery. These innovations have sparked curiosity. Sales have been strong. Buyers were familiar with these kinds of services abroad but not here, so they immediately connected with the project.

Upcoming projects and affordable housing

Another project is the renovation of the old BPI agency building on Rua de Sá da Bandeira in Porto. Will this become a luxury hotel?

AM: It will definitely be for tourism—a hotel—but it’s still in the licensing phase. We’ve submitted a Request for Prior Information (PIP). The next step is submitting the architectural project.

GZ: As for investment, we don’t know yet. It could be a two-star or a five-star hotel.

How many homes will you place on the market in the coming years, and for which segments?

AM: In the past two years, we’ve delivered around 200 homes—all in the North. We have luxury housing and about 80 apartments for the middle class in The Park Madalena and The Park Canelas.

Is investing in affordable housing in your plans? Why not?

AM: No, because the numbers don’t work due to land and construction costs. No investor can produce affordable housing without significant incentives—construction costs, production time, VAT, and other taxes would need to change. The prices set by the State just aren’t viable.

How can affordable housing be encouraged?

GZ: It’s relatively simple—let us build upwards. I understand architectural laws must be respected, but cities could designate areas where tall buildings are allowed. It’s the only solution.

AM: Cities must be rethought. Tall buildings allow cheaper construction, save space, and can be mixed-use—housing and services. This would free up central buildings that no longer make sense.

Construction challenges and labor shortage

What are the main challenges in construction today? Is labor shortage a big issue?

AM: It’s increasingly difficult. Older generations built faster and better. Young people don’t want to work in construction anymore. Even in Portugal, experienced workers are disappearing. A painter used to paint 20 m² per day, now maybe five. The workforce is slower and weaker, which raises costs. The only way to address this is through immigration, though it won’t match previous quality. Quality takes time.

How can this be improved? More specialized training?

AM: I support hands-on schools. Today, a skilled tradesperson earns more than a teacher or nurse. But companies can’t immediately offer that pay to someone inexperienced. I´d rather hire someone with training and experience. We must take this seriously and focus on training schools to give people experience before entering the job market.

Housing demand and financial literacy

Are you seeing more young people buying homes with the Young IMT program and state guarantees?

AM: Yes, it helps in middle-class developments. IMT exemption is a great incentive. Reducing VAT to 6% would also help. In real estate promotion, VAT is a cost—not deductible like in other sectors. A €1 million home ends up costing €1.23 million due to VAT, plus IMT on the land.

Who buys your homes—more Portuguese or foreigners? How is international demand without fiscal incentives?

AM: Many families are buying second homes. Lots of Brazilians are buying mid-range homes. We also see young professionals—especially in IT and engineering—buying.

What effect is falling interest rates having on your business, in terms of buyers and project financing?

GZ: The lower the rates, the better. We’ve seen increasing demand compared to when we launched the project a year and a half ago. Buyers say they’re ready now because interest rates are lower.

AM: For financing, it’s a relief. We use our own capital, attract foreign investment (especially from the US and Europe), and work with local banks. We’ve always been careful about not being overly leveraged. But younger generations lack financial literacy. A few years ago, when Euribor was at 0.7–0.8% and fixed rates at 1.4%, Portuguese people still chose Euribor. In France or Switzerland, 90% opt for fixed rates. In Portugal, people just want the lowest payment, but when rates spike—it’s chaos. Financial literacy should be taught in schools.

Political and regulatory context

Is current political instability or global uncertainty affecting your business?

AM: I’ve never worried too much about that. We just have to stay alert. There have always been wars and crises. We all feel the pain at the same time and adapt dynamically. The world is global. When Trump announced tariffs, Europe and others reacted quickly. That’s how it should be—adapt and find solutions. Our motto is: if there’s a problem, what’s the solution?

With legislative elections coming, what should the new government do to boost homebuilding, especially for the middle class?

AM: Allow taller construction and reduce bureaucracy. There are 308 municipalities, each with its own rules. We need more general laws and faster procedures. Developers invest expecting a 20–30% return in two years. If it takes four, they leave the country.

GZ: We don’t care who the government is. We just want clear rules.

Urban licensing and future plans

How do you view the recent changes to the “Simplex” urban licensing rules?

GZ: Exceptional—very good.

AM: It made licensing and converting Arthouse possible. It used to be nearly impossible to turn offices into housing. You needed unanimous condo owner approval—even one objection stopped everything. That’s not acceptable. The new rules bring market dynamism. But they still lack clarity. A revision is coming, but that’s not good for developers with bills to pay. There should be deadlines—if not met, projects should be automatically approved. Public institutions often paralyze things. People are afraid to make decisions. But the worst thing is not deciding—because then nothing moves forward.

What’s next for Invicta Park?

What are your future plans? Are you expanding geographically or diversifying segments? How much do you plan to invest, especially in housing?

AM: We’re becoming more dynamic and investing more. We already have a project in Lisbon. Though we’re focused on Porto and the North, we’re now in other regions too. The goal is to keep doing 3–4 projects a year. We’ve invested over €100 million so far.

GZ: We now want smart deals. We have our metrics, and the deals must fit them and have an exit strategy. We do our due diligence. When we enter a deal, we already know how we’ll exit—whether it’ll be residential, logistics, services, or hotel. As for future investment—it could be one project or ten. We’re very pragmatic. If we can’t solve it in half an hour, it’s not a good deal.