Portugal’s rental sector saw a shift in momentum mid-2024, potentially driven by a dip in available properties and fresh incentives for homebuyers, like reduced interest rates and IMT exemptions for young buyers. This quieter rental market, coupled with increased profitability for buy-to-let properties and new developments, might explain the 59% surge in rental supply by the end of 2024 compared to the previous year, as highlighted by idealista, Southern Europe’s leading real estate platform.
Rental Home Supply Expands Across Major Cities
Out of 18 major city centers examined, 16 experienced growth in their rental stock. Aveiro stood out, with a striking 111% increase in rental housing supply over the past year.
Significant gains in available rental options were also noted in Braga (80%), Lisbon (72%), Faro (72%), Leiria (70%), Funchal (66%), Porto (63%), and Coimbra (59%). Moderate increases below 50% were seen in Viana do Castelo (44%), Setúbal (43%), Bragança (38%), Castelo Branco (28%), Santarém (24%), Beja (14%), Vila Real (12%), and Guarda (11%).
In contrast, Portalegre (-14%) and Ponta Delgada in the Azores (-5%) were the only two cities to witness a decrease in rental homes.
Rental Options Increase in Most Districts and Islands
This upward trend was generally consistent across districts and islands: 17 of 18 regions reported increased rental stock over the last year. Aveiro led the charge, boasting an impressive 85% increase.
Other districts and islands showing substantial gains in rental housing include Viana do Castelo (79%), Beja (76%), Braga (65%), Porto (64%), Faro (63%), Leiria (60%), Coimbra (60%), Lisbon (58%), Castelo Branco (51%), Santarém (49%), Madeira Island (46%), Setúbal (38%), Vila Real (35%), Guarda (29%), Portalegre (29%), and Bragança (12%).
However, the island of São Miguel experienced a notable decrease of 80% in rental availability, making it the only region analyzed with fewer homes available during this period.
Methodology
The analysis was conducted by idealista/data, the proptech division of idealista. They use data from their platforms in Portugal, Spain, and Italy, along with public and private sources, for market analysis, property valuation and investment services.
