Portugal Rental Property Market: October 2024 – Analysis and Forecasts

October 2024 saw a continued increase in rental prices in Portugal. The average rental price reached €16.1 per square meter, up 5.1% from October 2023.

Despite a slight decrease of 1.5% compared to the previous quarter (Q3 2024), the overall trend points to a steady increase in prices in the rental market.

Regional differences:

Rental price dynamics vary significantly by region. Ten major Portuguese cities have seen rental rates increase over the past year. The most significant increases were seen in:

Coimbra (+11%): This university city is highly attractive to students and teachers, which explains the significant price increases.
Funchal (+10.9%): The popular tourist destination on the island of Madeira is also characterized by high demand for rental housing.
Viseu (+10.3%): The increase in Viseu is likely due to the development of the region’s economy and the increase in population.

They are followed by Braga (+9.9%), Santarem (+6.9%), Porto (+6.1%), Lisbon (+5.3%), Setubal (+4.3%), Castelo Branco (+1.8%) and Viana do Castelo (+1.1%).

In Leiria, prices remained stable, while in Evora (-3.6%) and Aveiro (-1.4%) there was a decrease.

This shows the uneven development of the rental market across the country.

Rating of cities by rental cost:

Lisbon remains the leader in terms of rental prices (€22/sq.m), followed by Porto (€17.5/sq.m) and Funchal (€15.2/sq.m).

The most affordable rental options can be found in Castelo Branco (€6.6/sq.m), Viseu (€7/sq.m), Leiria (€8/sq.m), Viana do Castelo (€8.1/sq.m), Santarem (€8.3/sq.m) and Braga (€9.5/sq.m).

Rising rental prices in Portugal reflect the high level of competition in the housing market, driven both by the growth of tourism and the country’s growing appeal to foreigners. Despite localised declines in individual cities, the overall trend points to further price increases, at least in the short term. Investors considering Portugal as a real estate investment market should take these trends into account and analyse regional market characteristics.