In Portugal, things tend to cool down during autumn and winter. However, in the case of the Portuguese rental market, things really started to heat up at the end of 2021. The cost of renting a property in Portugal saw notable increases, while the number of new rental contracts signed also went up. At the same time, high demand also means that properties are spending less time on the market in Portugal. In the last three months of last year, average rent in Portugal reached 6.25 euros per square meter (euros/m2), which represents a year-on-year increase of 8.3% and a 7.6% growth compared to the previous quarter. This figure was calculated by the National Statistics Institute in Portugal (INE), taking into account the 23,394 new rental contracts registered in that period, a number that is 6.2% higher compared to the one registered in the final stretch of 2020.
This was a reality registered in almost all of Portugal. An increase in rental activity compared to the corresponding period was observed in 18 of the 25 sub-regions of the country registered. At the same time, average rental prices rose in 21 of the 25 sub-regions compared to the fourth quarter of 2020, as demonstrated by INE in a press release at the end of March 2022.
The largest increases in rent in Portugal were recorded in:
- Autonomous Region of the Azores (+12.6%),
- Beira Baixa (+12.5%),
- Alentejo Litoral (+10.1%)
The only year-on-year decreases in rent in Portugal were seen in the sub-regions of:
- Baixo Alentejo (-5.7%)
- Alto Alentejo (-3.2%)
- Alto Tâmega (-3.0%)
The Douro region showed a year-on-year rate of zero.
Where are the most expensive places to rent in Portugal?
The report states that: “The highest rental prices were recorded in the Metropolitan Area of Lisbon (9.20 euros/m2), the Algarve (7.07 euros/m2), the Metropolitan Area of Porto (6.84 euros/m2) and in the Autonomous Region of Madeira (6.70 euros/m2),” On the other hand, the cheapest place to rent in Portugal is Trás-os-Montes (2.12 euros/m2), followed by Douro (3.00 euros/m2) and the sub-region of Beiras and Serra da Estrela (3.09 euros/m2), according to the data.
Which Portuguese municipalities have the most expensive and cheapest rent?
In the last months of last year, “there was a year-on-year increase in the average rent in the 24 Portuguese municipalities with more than 100 thousand inhabitants (22 municipalities in the previous quarter)”, reveals INE.
Looking at the municipalities that registered the biggest rises in rents in this period, the highlights are:
- Funchal (+16.1%)
- Vila Nova de Famalicão (+13.5%)
- Coimbra (+12.7%)
- Santa Maria da Feira (+12.3%)
The least marked increases were observed in Amadora (+3.9%), Lisbon (+3.9%) and Guimarães (+4.0%).
Unsurprisingly, the municipalities with the highest new lease values are:
- Lisbon (11.54 euros/m2)
- Cascais (11.29 euros/m2)
- Oeiras (10.21 euros/m2)
- Oporto (9,15 euros/m2)
Note that all these municipalities registered a year-on-year growth in rent lower than that of the country (+3.9%, +7.8%, +5.5% and +7.5%, respectively).
At the bottom of the table and the Portuguese municipalities with the cheapest rent are:
- Guimarães (4.17 euros/m2)
- Barcelos (4.25 euros/m2)
- Santa Maria da Feira (4.38 euros/m2)
- Vila Noca de Famalicão (4.80 euros/m2)
These are, therefore, the municipalities that have the lowest rents among the 24 Portuguese municipalities with more than 100 thousand inhabitants.
With regard to new rental contracts, there was an increase in activity in almost all the municipalities in Portugal (22 out of 24), with the following areas standing out:
- Santa Maria da Feira (25.3%)
- Braga (24.4%)
- Loures (21.2%)
Only in Funchal (-26.4%) and Gondomar (-2.4%) were there fewer contracts signed.