Residential rental prices in Portugal recorded a decline in March, maintaining the downward trend observed over recent months. The increase in rental housing supply continues to support greater market stability and a gradual adjustment in lease values.

Although tenant demand remains strong, average rental rates are currently below the peak levels recorded last year, reflecting improved affordability across several regions of the country.

The most significant corrections were registered in districts such as Porto and Faro, where residential lease prices declined. Nevertheless, some municipalities continued to record price growth, particularly in inland areas, highlighting the differing dynamics between local housing markets.

Lisbon remains the most expensive residential leasing market in Portugal, followed by Porto and Funchal, with average asking rents exceeding €15 per square metre. In contrast, districts such as Viseu, Bragança and Castelo Branco continue to offer more competitive rental values.

Over the past year, the North and Algarve regions were the only areas to record more substantial decreases in residential rents, while the Lisbon Metropolitan Area and Madeira maintained relative stability or moderate growth.

The recent performance of rental values indicates a more balanced market environment, supported by increased residential supply and policies encouraging new housing development and property conversion for lease purposes.

For tenants, current conditions may create greater access to competitively priced residential units, particularly outside the main urban centres. Property owners and landlords, meanwhile, face a market requiring more calibrated pricing strategies to preserve asset competitiveness.

Overall, Portugal’s residential leasing sector is showing improved affordability across several regions, despite the continued disparity between cities, districts and local submarkets.

Text adapted from Supercasa