According to an article published in idealista; at a time when buying a home is more expensive, the rental market remains dynamic and the increased number of people turning to renting isn't purely due to the high prices of property, but also as a result of the higher costs of financing.

Median rent rose to nearly 7 Euros per square metre

As demand continues to outweigh existing supply, the cost of rent has risen again. Provisional data from the INE revealed that in the first quarter of 2023, “the median rent of the 24 300 new lease contracts in Portugal reached €6.74 per square meter (€/m2).”

This value represents a year-on-year increase of 9.4% in rental costs. This rise was noted to be “lower than the year-on-year change recorded in the fourth quarter of 2022 (+10.6%)”, in a bulletin published on June 27.

Rental prices were 2.5% higher in the last quarter of 2022

The highest rental values were observed in the last quarter of 2022 when they reached 6.91 €/m2. So in comparison to this period, it could be argued that house rental costs fell by 2.5% in the first three months of 2023.

15 of 25 sub-regions recorded an increase in new lease contracts

Many regions saw an increased number of rental contracts being signed compared to the same period last year, with emphasis on Alto Alentejo (+20.1%), Douro (+19.2%) and Alto Tâmega (+16.2%). As expected, the metropolitan areas of Lisbon and Porto saw some of the highest increases in rental contracts, accounting for 49.4% of new lease contracts.

Four sub-regions showed values ​​higher than the national level (6.74 €/m2) and also year-on-year growth rates higher than the national rates (9.4%).

Lisbon Metropolitan Area: presented a median value of 10.26 €/m2 and a year-on-year growth of 12.6%;

Algarve: rent in this sub-region stood at 7.81 €/m2, 10.8% higher than the same period last year;

Autonomous Region of Madeira: renting a house cost an average of 7.73 €/m2, 9.8% more than in the same period last year;

Porto Metropolitan Area: median rent reaches 7.29 €/m2, representing an increase of 10.3% compared to the same period last year.

According to INE, there were even year-on-year increases of more than 15% in the Alentejo Litoral (+25.6%), Beiras and Serra da Estrela (+17.6%), Aveiro Region (+16.9%), Coimbra (+16.8%), Leiria (+16.7%), Central Alentejo (+16.0%) and Viseu Dão Lafões (+15.9%). The cheapest sub-region continues to be Terras de Trás-os-Montes (3.00 €/m2).

Rental prices slow in 15 of the 25 large municipalities

In the first quarter of 2023, there was a year-on-year increase in median rent prices in the 24 municipalities with more than 100,000 inhabitants, with the highest increases registered in the municipalities of Porto (+22.1%), Lisbon (+20.6%) and Barcelos (+20.4%). The lowest rises in house rents in year-on-year terms were observed in Vila Nova de Famalicão (+4.3%) and Loures (+6.1%).

In these municipalities with more than 100,000 inhabitants, the lowest house rental prices were registered in Guimarães (4.46 €/m2) and in Vila Nova de Famalicão (4.57 €/m2).

There was also a deceleration in the value of house rents in 15 municipalities at the start of 2023, which was seen in only 9 municipalities in the final quarter of 2022. These decreases were highest in Oeiras (-11.8%), Coimbra (-8.7%) and Guimarães (-8.1 %).