Rents Climb 5.1% Nationally While Lisbon and Madeira Home Values Retreat — Madeira Tops Regional Rental Table at 6.5%
INE data show per-square-metre rents rose 5.1% year-on-year in March 2026, with Madeira leading at 6.5% and all regions positive. But sale prices diverged — Lisbon fell 0.9% to €5,783/m² and Madeira dropped 1.3% to €4,372/m². Average national rent reached €16.13/m².
Portugal's rental market kept climbing in March, even as sale prices in two of the country's most-watched regions finally started to retreat. The Instituto Nacional de Estatística reported on 13 April that the year-on-year rise in rents per square metre paid by new tenants reached 5.1 per cent in March 2026, down a slim 0.1 percentage point from February. Every region in the country registered a positive year-on-year variation.
Madeira logged the steepest rent increase at 6.5 per cent — the fifth consecutive month the autonomous region has topped the national table. The Algarve and Greater Lisbon followed. At the national level, the average rent reached roughly €16.13 per square metre in the January-March quarter, up 0.6 per cent on the previous three months.
The puzzle: sale prices diverging from rents
What makes the March release different from the pattern of 2024 and 2025 is the widening gap between the two halves of the market. While rents kept rising in every region, asking prices for homes to buy fell in both Lisbon and Madeira. In Lisbon, the median sale price slipped 0.9 per cent to €5,783/m²; in Madeira, it dropped 1.3 per cent to €4,372/m².
That divergence is new. Through most of 2025, rents and sale prices moved together, often both rising in double digits. The fact that sale prices are softening while rents keep climbing points to a shift in financing conditions: the Euribor stabilisation in early 2026 has not yet translated into cheaper credit for buyers, and investors who would normally step in at this point in the cycle are waiting out the Mercosur-EU entry into force on 1 May and the summer tourism season before committing capital.
Why rents keep rising
Three forces are still pushing the rent curve. First, supply: Lisbon and Porto alone are short an estimated 60,000 rental units against demand at current price points. Second, the short-term rental market remains the dominant landlord in historic centres, and the Alojamento Local reform promised in 2024 has yet to deliver a measurable stock of re-converted long-term units. Third, population: Portugal's net inward migration ran positive for a fifth year in a row in 2025, and the rental cohort of that inflow — CPLP workers and digital nomads in particular — enters the market at or above the prevailing rate.
What it means
For tenants, the INE series confirms what practitioners already see on the ground: the national rental curve is still pointing up, even if the pace has stabilised around 5 per cent. For landlords, the divergence between rising rents and softer sale prices improves gross yields on paper — the idealista rental-yield series put Portuguese buy-to-let at an average 6.3 per cent in Q1, the highest reading in more than a decade.
For policy, the March release makes the Montenegro government's housing package a more complicated sell. The cabinet's favoured narrative — that sale-price moderation is the sign of cooling — does not travel to the rental market, where the numbers still look inflationary. With the OECD Economic Survey of Portugal 2026 singling out housing affordability as the country's sharpest structural headache, the rents line is the one that matters most for the median household, and it is still pointing in the wrong direction.
