Rent prices have escalated by a significant 10% increase.
Current trends in median rent changes across various regions in Portugal reveal a steady but slowing growth in rental prices as of 2025, compared to the same period in 2024.
The median rent per square meter for new lease agreements reached €8.43 in Q4 2024, up from €7.71 in Q4 2023, marking notable growth in rental prices year-on-year.
Regional highlights show that the highest median rents above the national average were seen in Greater Lisbon, Setúbal Peninsula, Autonomous Region of Madeira, and the Algarve. Within cities, Lisbon led with €16.04/m² and Porto followed with €13.04/m² in Q4 2024.
In the first quarter of 2025, new contract rents rose by 10% year-on-year nationally, with Greater Lisbon posting €13.16/m² and Madeira €10.44/m². The Porto Metropolitan Area also had a significant median of €9.12/m².
Although nominal rent increases remain positive, rental inflation is decelerating. For example, rental inflation slowed from 14.4% in May 2024 to just 4.4% in May 2025. The housing component of CPI registered a 5.2% year-on-year growth in May 2025, down from 7.1% in April 2024.
Most municipalities with over 100,000 people saw rent increases in early 2025. Gondomar had the highest year-on-year rise at 24.4%, while Lisbon’s median rent rose moderately by 5.1%, despite having the highest median overall. On the other hand, some regions experienced significant rent decreases, notably Alto Tâmega e Barroso (-26.8%), Alentejo Central (-24.2%), and others in the Alentejo and northern interior.
The increase in median rents is driven by limited rental supply and rising demand, compounded by affordability challenges in the housing market. Lisbon's growing appeal for entrepreneurs and foreign investors supports strong rental market fundamentals in the capital.
It is important to note that the data provided by INE is still provisional. Furthermore, no new information about the rent values in the Central Alentejo, Autonomous Region of Madeira, Setúbal Peninsula, Algarve, or Porto Metropolitan Area was provided. Additionally, no new information about the rent values in the municipalities with fewer than 100,000 inhabitants was provided.
In conclusion, median rents across Portugal continue to rise in 2025 compared to 2024, but the pace of growth is moderating, with substantial regional variation: strong increases in major urban and coastal areas, some mild growth in other municipalities, and notable declines in certain inland regions.
- Despite the moderating pace of rental growth in Portugal as a whole, some regions like the Algarve, Greater Lisbon, Setúbal Peninsula, and the Autonomous Region of Madeira continue to have median rents above the national average.
- In the realm of finance and investing, the steady but slowing rental growth in Portugal, particularly in urban and coastal areas such as the Algarve and Porto Metropolitan Area, presents potential opportunities for real-estate investment.
- Interestingly, while the Algarve is among the regions with higher median rents, some areas in the interior, such as Alto Tâmega e Barroso and Alentejo Central, have seen notable rent decreases in 2025.
