Portugal has a long-standing problem of lack of supply in the rental market. However, there are more and more families looking for houses to rent, as the number of new contracts continues to grow, as shown by data from the National Statistics Institute (INE).
It is precisely this imbalance between lack of supply and high demand that has been behind the rise in house rents year after year, with the average value set at €6.52/m2 in the last 12 months.
Many families now find it more difficult to buy a home, due to high property prices, the worsening cost of living due to inflation as well as the increase in interest rates, which make mortgages more expensive.
But even with increasing house rents and the lack of supply, families continue to look for houses to rent as a housing solution. In the second half of 2022 (last 12 months), there were 92,664 new rental contracts, up 6% compared to the same period of the previous year (+16% compared to 2020 and +24% compared to 2019). The higher demand for the rental market recorded in recent years can be explained by several factors, from the rising costs of home loans, which delays the decision to buy a home, to the flexibility of this market.
In addition, the increase in the number of new rental contracts can also be explained by the arrival of more and more foreigners to Portugal - many digital nomads (550 visas have already been issued since October) - who, having greater purchasing power than the Portuguese, put even more pressure on this market.
According to Remax, foreigners represented more than half (53%) of housing rental contracts signed in 2022, said Público. This proportion is well above that recorded in 2019 (33%) and 2021 (37%).
It should be noted that in the buying and selling market, foreigners are also increasingly active, representing 11.4% of total sales in 2022, the highest figure since there are INE records. As a result, the foreign population living in Portugal increased in 2022 for the seventh consecutive year, totalling 757,252. And the Brazilian and Indian communities were the ones that grew the most, according to the Foreigners and Borders Service (SEF).