Portugal's New-Lease Rents Jump 9.1% in Early 2026, With Lisbon at €17.42 a Square Metre

The cost of signing a new lease in Portugal climbed again at the start of 2026. The median rent on contracts signed between January and March reached €9.46 per square metre, up 9.1% on the same period a year earlier, according to figures released on 26 June by the statistics office INE (Instituto Nacional de Estatística — Statistics Portugal). Crucially, the pace is quickening: the annual rise had been 7.9% in the previous quarter.

The numbers cover 39,395 new rental contracts for family housing, and they capture the part of the market that matters most to anyone arriving in the country — because new tenants almost always sign new leases, and new leases are where the price pressure is concentrated.

Lisbon stays on top, but the fastest rises are elsewhere

Among the 24 municipalities with more than 100,000 inhabitants, Lisbon remained the most expensive at €17.42 per square metre — though its 8.2% annual rise actually trailed the national average. Around the capital, Cascais followed at €16.43 and Oeiras at €15.47, with Porto at €14.60. At regional level, Greater Lisbon (Grande Lisboa) ran to €14.38 a square metre, ahead of Madeira at €11.97, the Setúbal Peninsula at €11.35 and the Algarve at €10.71.

The steepest jump of any large municipality came not from the usual suspects but from the north: Vila Nova de Famalicão, where new-lease rents rose around 15.1% year on year. It is the clearest sign yet that the squeeze has spread well beyond Lisbon and the Algarve into mid-sized cities that were, until recently, comfortably affordable.

Why new contracts run so far ahead of the cap

The headline that confuses many newcomers is the gap between these figures and the much-publicised rent cap. Portugal limits how much a landlord can raise the rent on an existing contract each year — the legal coefficient for 2026 lets standing rents rise by roughly 2.24%. But that ceiling does not apply when a property is let to a new tenant on a fresh contract. There, the landlord can ask whatever the market will bear, which is why new-lease medians are climbing four times faster than the regulated update on sitting tenancies.

That divergence is the engine of Portugal's affordability problem. It rewards landlords for turning tenants over, penalises mobility — moving house almost always means a big rent jump — and falls hardest on the people with the least leverage: students, young workers and recent arrivals who have no existing contract to protect.

A rental market under the same strain as sales

The rent surge tracks a sales market that has also kept setting records, with house prices hitting fresh highs through 2026 and bank valuations climbing in double digits. With buying out of reach for many, demand is funnelled into renting, and foreign money is part of the mix on the ownership side, where the Bank of Portugal pinned foreign buyers at 28% of 2025 transactions. The result is a market where both renting and buying are getting dearer at once.

What This Means for Expats

• Budget for the new-lease rate, not the cap: if you are moving to Portugal or switching homes, the 2.24% figure is irrelevant to you. Price your search against these new-contract medians — and expect Lisbon, Cascais and Oeiras to sit well above them.
• Look beyond the obvious cities: the fastest rises are now in places like Famalicão, but mid-sized northern and interior towns can still undercut the Lisbon-Cascais-Oeiras band by a wide margin if your work allows it.
• Staying put has a hidden value: because standing contracts are capped, an existing lease is worth protecting. Think hard before giving up a long-held tenancy, since re-entering the market means paying today's rate.
• Know the lease rules before you sign: understand the caução (deposit), the fiador (guarantor) and your rights under the NRAU before committing. Our guides to renting as a tenant and signing a rental lease walk through the details.

With the annual pace accelerating rather than easing, the first-quarter data offers little comfort to tenants hoping the market had peaked. For now, the cheapest rent in Portugal remains the one you already have.