Rent prices experiencing a decrease?
Rental Prices Fall in Lisbon, São Paulo, and Porto
The rental market in major cities across Portugal has seen a significant shift in recent quarters, with prices decreasing in Lisbon, São Paulo, and Porto.
In Lisbon, lease agreements signed in Q2 2025 were 3.4% lower year-on-year compared to Q2 2024. Despite a slight quarterly recovery of 0.7% in Q2 2025, the overall trend remains downward due to an increased supply of homes available for rent since mid-2023.
For São Paulo, rents experienced the largest annual drop in four years. After minimal change in Q2 2024, rents decreased by 2.7% in Q3 2024 and by another 1.5% in Q1 2025. However, Q2 2025 showed a small quarterly increase of 0.7%, but this did not offset the year-on-year decline.
In Porto, rental prices continued to decline for the third consecutive quarter, with a 0.7% decrease year-on-year in Q2 2025. This trend reflects the ongoing cooling of prices in the city.
This cooling rental market in major cities is linked to a significant increase in rental supply, following a sharp 30% rent rise in the previous year with record price levels. Landlords have reacted by listing more properties, easing demand pressure and causing rents to fall naturally.
While rents are declining in major urban centers, the property sale market remains heated across most municipalities in Portugal. In Q1 2025, 92% of monitored municipalities saw year-on-year house price increases above those of Q4 2024. The median rent price for new contracts rose 10% year-on-year until March 2025, reaching €8.22/m².
Regional rental price disparities continue in Portugal, with Lisbon remaining the most expensive at around €22.2/m², while other municipalities, like Castelo Branco, offer rents as low as €6.8/m².
In summary:
| City | Year-on-Year Rent Change Q2 2025 | Recent Quarterly Trend | Notes | |-------------|----------------------------------|--------------------------------|-------------------------------------| | Lisbon | -3.4% | +0.7% quarterly (Q2 2025) | Increased supply cooling rent prices| | São Paulo | Largest annual drop in 4 years | -2.7% (Q3 2024); -1.5% (Q1 2025); +0.7% (Q2 2025) | Overall downward trend | | Porto | -0.7% | Declining third consecutive quarter | Cooling rent market |
This reflects a broader market dynamic in Portugal: rental prices falling due to increased supply after a steep prior rise, while home purchase prices are generally increasing across most municipalities.
[1] Confidencial Imobiliário reports a decline in rental prices in Porto and a cooling rental market in São Paulo and Lisbon. [2] Regional rental price disparities continue in Portugal, with Lisbon remaining the most expensive at around €22.2/m², while other municipalities, like Castelo Branco, offer rents as low as €6.8/m². [3] The increased influx of homes for rent in Lisbon and Porto has been visible since mid-2023. [4] While rents are declining in major urban centers, house purchase prices continue to rise strongly nationwide. In Q1 2025, 92% of monitored municipalities saw year-on-year house price increases above those of Q4 2024. The median rent price for new contracts rose 10% year-on-year until March 2025, reaching €8.22/m². This indicates that while rental markets experience cooling, the property sale market remains heated.
In light of the decreasing rental prices, investors might want to keep an eye on opportunities in the housing-market of Lisbon, São Paulo, and Porto, as the ongoing increase in rental supply could offer promising investments in real-estate. Meanwhile, the heated property sale market across most municipalities in Portugal could be an interesting arena for those focusing on home financing and purchase.
