Europe

These Regions of Portugal Command the Highest Rent Prices

Portugal's buy-to-let market is thriving thanks to booming tourism, a strong employment market, and the country's growing desirability as a place to live and work. We explore some of the markets with the highest rental rates and most robust growth.

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If you’re a property investor looking for your next profitable venture, Portugal should be on your radar. While property prices have been on a healthy incline, rental yields in certain regions still stand out as particularly profitable thanks to escalating rent prices. We explore some of the areas commanding the highest rent prices in Portugal.

Lisbon

As the capital city, it’s unsurprising that Lisbon commands the highest rental prices in the country, with average monthly rents standing at €2,396. With a rich cultural heritage and excellent quality of life, it’s no wonder that Lisbon is one of the most expensive cities in Portugal for renters. However, its growth in the past year has still been phenomenal, with average rental values increasing by a massive 38% year on year from June 2022 to June 2023.

Setubal

Located to the south of Lisbon, Setúbal is a port city renowned for its natural beauty, including the Tróia Peninsula and the Arrábida Natural Park. Over recent years, Setúbal has seen a sharp rise in rent prices thanks to increased tourism in this area of Portugal. In the year to June, rents have risen by a whopping 25% to make average rental values up to €1,299. But with its proximity to the capital (just under a 40-minute drive), the location is ideal for both tourists and commuters alike.

Porto

Portugal’s “second city” is famed for its port wine, historic districts and the Douro river. In recent years, the city has seen an influx of both tourists and international residents wanting to make it their home.

With a robust job market, particularly in the tech sector, the city is brimming with people looking for good quality rental properties. Average rental prices here sit at €1,415, representing 18% year-over-year growth to June 2023.

Faro

As the administrative centre of the Algarve region, which is famed for its golden beaches and golf courses, Faro is the gateway to some of the most popular resorts. Its airport welcomed over 8 million passengers in 2022.

While traditionally more affordable than Lisbon and Porto, rental prices have been on the rise due to the inflow of expatriates and tourists. Average rental values now sit at €1,484 per month, representing a 17% increase year-on-year.

Island of Madeira

An autonomous region of Portugal, Madeira is an archipelago known for its lush landscapes and Madeira wine. The winters are mild thanks to the low latitude of the island, making Madeira a popular year-round tourist destination. While not as expensive as mainland Portugal, the cost of living is relatively high due to its remote location, commanding high rental rates of €1,365 per month.

Portugal’s diverse landscape offers investors a range of opportunities. Whether you’re looking to generate rental income buoyed by tourism in Faro and Madeira or long-term stability with robust job markets in Lisbon and Porto, Portugal’s high-value rental markets offer something for every investor.


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