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According to Statistics Portugal, over Q1 2025, Portugal’s rental market experienced a remarkable surge, with the national median price for new leases rising 10 percent year-on-year and reaching 8.22 €/m².
This represents a slight acceleration from the 9.3 percent year-on-year growth recorded in Q4 2024, signalling that rental demand is not only persistent but strengthening.
This continued growth confirms Portugal’s strong market momentum, which makes real estate investment both attractive and increasingly time sensitive.
Portugal Rental Market in 2025: Here's What You Need to Know
The Portuguese real estate market keeps growing, reflecting yet another year of continuous and consistent growth.
ÂThe national median rent for new leases increased to 8.22 €/m², supported by a 10% year-on-year rise; an acceleration compared to the previous quarter’s (Q4 2024) 9.3% growth.
ÂA total of 23,417 new lease contracts were signed in Q1 2025, representing a 10.4% decline in activity compared to Q1 2024.Â
ÂThis contraction indicates supply pressures that continue to push rental values upward.
Portugal Housing Market Buy to Let: Where Can You Find the Highest Rentals for ROI?
According to the latest data made available by Statistics Portugal, published in June 2025, several regions remain well above the national median, showcasing concentrated demand and consistently strong rental yields.Â
In Q1 2025, the highest rental values were recorded in:
Greater Lisbon: 13.16 €/m²
ÂMadeira Autonomous Region: 10,44 €/m²
ÂSetúbal Peninsula: 10,24 €/m²
ÂThe Algarve: 9,92 €/m²
ÂPorto Metropolitan Area: 9.12 €/m²
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These numbers reinforce the ongoing attractiveness of Portugal’s coastal and metropolitan regions for buy-to-let investors, where demand consistently exceeds supply.
Top Municipalities for Rental Yields
Among municipalities with over 100,000 residents, those in the Greater Lisbon metropolitan area continue to lead the market.
The following are the best, top-value markets for stable returns, where demand is highest, and risk is lowest:
Lisbon: 16.00 €/m² (YoY +5.1%)
ÂCascais: 14.72 €/m² (YoY +1.1%)
ÂOeiras: 13.89 €/m² (YoY +4.2%)
ÂAmadora: 12.20 €/m² (YoY +9.7%)
ÂPorto: 12.94 €/m² (YoY +8.5%)
ÂMatosinhos: 10.79 €/m² (YoY +6.2%)
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These figures not only highlight the sustained strength of Lisbon and Porto but also show that surrounding municipalities remain highly competitive, benefiting from urban spill over and strong commuter demand.
Top Municipalities for Rental Growth
These municipalities recorded some of the highest year-on-year increases in rental values during Q1 2025, making them some of Portugal’s strongest emerging markets, where there might be a higher risk, but also potentially increasing growth.
Gondomar: Approximately 10.20 €/m² (YoY +24.4%);
ÂMaia: 8.83 €/m² (YoY +18.0%);
ÂFunchal: 11.34 €/m² (YoY +17.1%);
ÂVila Nova de Gaia: 9.91 €/m² (YoY +15.2%);
ÂCoimbra: 8.67 €/m² (+10.9%).
Top Regions YoY Rental Growth Rates
Several regions, not just municipalities, recorded double-digit year-on-year rental growth, which is crucial for demonstrating that buying to let in Portugal is an excellent idea all over the country, not just in Lisbon.
Madeira: +25.3%
ÂAlentejo Litoral: +22.9%
ÂAlgarve: +13.0%
ÂPorto Metropolitan Area: +12.3%
Why is Portugal's Rental Market So Appealing?
While rising property prices may be grabbing headlines, not only for renting but also for buying, understanding the driving forces behind this growth is crucial for prospective investors.Â
One key factor is the steady influx of international residents, bolstered by favourable immigration and tax incentives that position Portugal as a prime destination for professionals, retirees, and entrepreneurs alike. Â
Additionally, a range of government-led initiatives, such as the Golden Visa and D2 Visa programmes, encourage property modernisation and new construction, thereby boosting the overall attractiveness of the real estate market.Â
Not to mention, Portugal is simply one of the best countries in the world to live in, with many quality of life in its favour.
When taken together, these elements create a vibrant environment that benefits property owners, offering the potential for strong returns on investment through both resale value and rental income.
Read more:
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Buying Property in Portugal: The Ultimate 2025 Guide
What This Means for Investors & Expats
The Q1 2025 numbers point to a market where:
Rents are rising faster than before, even as fewer contracts are being signed.
ÂMajor cities are hitting record levels, driven by increased demand and shorter supply.
ÂLandlords continue to enjoy increasing rental yields, especially in the Lisbon and Porto metropolitan areas.
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In other words: the fundamentals for rental investment remain exceptionally strong, and early investors stand to benefit the most from continued upward pressure on prices.
Nothing should stop you from taking this opportunity. Especially because you can count on Portugal Homes' turnkey solutions for local and international investors and start investing in Portugal’s real estate right now. Â
With over 3 decades of experience in the local market, we provide a totally customised experience, from finding the best listings according to your goals to managing your property and advising on your tax responsibilities.Â
Our dedicated team also offers precious consultancy if you wish to secure not only property, but also a residency permit in one of Europe’s most desirable destinations of the past decade.Â
Portugal Homes is a one-stop shop for real estate investment in the country.
Contact us and don’t miss out on a great opportunity to invest in Portugal’s real estate market while is still worth it.
Portugal Homes
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