Portugal Rental Prices Drop from October Peak — What It Means for Expats
National median rent fell to €16.2/m² in February, down from October's record high. Porto and Braga see annual declines while Lisbon stabilises. Full breakdown by city.
Portugal's rental market is showing signs of relief after months of record-breaking prices, with new data from property portal Idealista showing a 1.4% monthly drop in February 2026 — pulling the national median back from its all-time high.
The Numbers: Down from October's Record
The national median rent now stands at €16.2 per square metre, down from the historic peak of €17/m² recorded in October 2025. While the decline is modest, it marks the clearest sign yet that Portugal's overheated rental market may be starting to cool.
The Idealista report analysed 15 districts and autonomous regions, finding that 9 of them recorded monthly price increases — but the national trend remains downward, driven by significant softening in major urban centres.
City by City: Where Rents Are Falling
The data reveals a clear split between Portugal's major cities and secondary markets:
- Lisbon: Still the most expensive at €21.7/m², but rents fell 0.5% year-on-year — a notable reversal for a city that saw explosive growth in 2023–2024
- Porto: €16.8/m², with a -2.5% annual decline — the steepest fall among major cities
- Braga: €10.2/m², down 1.6% annually — good news for expats in Portugal's third city
- Funchal (Madeira): €16.2/m², essentially stable (+0.5%)
- Faro (Algarve): €14.7/m², up 3.2% annually — demand from international buyers keeps the south pressured
Where Rents Are Still Rising
Not all markets are cooling. Interior regions and secondary cities saw the largest annual increases:
- Bragança: +16.9% annually — the highest rise in Portugal, driven by domestic migration
- Coimbra: +11.4% — university city seeing sustained demand
- Leiria: +10.4%
- Setúbal: +9.3% — proximity to Lisbon keeping prices elevated
The Most Affordable Markets
For expats willing to look beyond the main cities, several districts offer genuinely affordable rentals:
- Viseu: €7.5/m² — one of Portugal's best-value inland cities
- Castelo Branco: €7.1/m²
- Bragança: €6.7/m² — despite recent rises, still the cheapest capital
What This Means for Expats
The rental data carries mixed signals for those considering a move to Portugal in 2026:
The good news: If you're looking at Porto or Lisbon, the worst of the rental surge appears to be over. Porto's 2.5% annual decline suggests the market correction that many economists predicted is now underway. Landlords who overpriced properties in 2024 are being forced to adjust.
The catch: Lisbon at €21.7/m² still means a 70m² apartment runs approximately €1,519/month — well above what most Portuguese residents can afford on local salaries, and a significant outlay even for remote workers earning foreign salaries.
The opportunity: Secondary cities like Braga, Aveiro, Coimbra, and Évora now offer a compelling mix of quality of life and affordability. Braga in particular — with its growing tech sector, excellent university, and direct transport links to Porto — is increasingly popular with younger expats and digital nomads.
What's Driving the Cooling?
Several factors are contributing to the stabilisation:
- Government intervention: The Mais Habitação (More Housing) programme introduced rent controls and incentives for landlords to enter the market at lower price points
- New supply entering the market: A wave of apartment completions in 2025 is gradually improving availability in Porto and Lisbon suburbs
- Demand plateau: After several years of rapid growth in expat and digital nomad arrivals, the pace of new arrivals appears to have moderated
- Mortgage competition: As Euribor falls following ECB rate cuts, some renters are transitioning to buyers, reducing rental demand slightly
Outlook for the Rest of 2026
Most analysts expect Portugal's rental market to remain broadly stable through 2026, with possible further modest declines in Porto and Lisbon. However, a full reversal to pre-2022 price levels is considered unlikely — the structural housing shortage in Portugal's major cities remains unresolved, and demand from expats, students, and domestic migrants continues.
For expats planning a move, now may be a better time to negotiate than 2024 or early 2025. Landlords in Lisbon and Porto are increasingly open to offers below asking, particularly for longer-term contracts.
