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Housing rents in Portugal rose, on average, 7.4% from 2024 to 2025 — more than triple the legal update coefficient of 2.24% that landlords can apply to active contracts in 2026. This is revealed by the Aluseg Rent Index, which aggregates median rents by municipality, district, and typology from 42,000 records (primary source: INE). This article summarizes the essentials and shows where rents have increased the most.
The number that matters: 7.4% vs. 2.24%
There are two rents in Portugal, and they are diverging. The rent for active contracts can only increase by the legal coefficient — 2.24% in 2026. The rent for new contracts, freely set in the market, rose 7.4% in a single year. The result is a ‘turnover premium’: a property re-let to a new tenant yields significantly more than the same property with an old contract — one of the factors shaping landlords’ decisions and fueling the debate on the new rental regime.
The increase was across the board for all typologies: T0 and T1 at +7.5%, T2 at +7.4%, T3 at +7.3%.
2026 Update: cities are starting to cool down
The latest data from the INE (1st quarter of 2026) brings news: after rising without pause during 2025, the urban market showed the first sign of cooling. In the 24 urban municipalities analyzed, the median rent of a T2 remains about 7.7% above the same period in 2025 — but in 15 of those 24 municipalities, the rent fell compared to the previous quarter. Loures (−7%), Barcelos (−5.9%), and Cascais (−5.1%) lead the declines in the outskirts.
The big exception is Lisbon, which bucks the trend and continues to rise: +5.2% in the quarter alone, exceeding €1,617 for a T2. The emerging pattern for 2026 is clear — rents stop rising (or fall) on the outskirts of major metropolitan areas, while central Lisbon continues to push upwards. See the full table of the 24 municipalities, with year-on-year and quarterly variations, in the Aluseg Rent Index.
Where rents rose the most
Growth was not led by the big cities — it was in the interior and medium-sized municipalities that the largest year-on-year increases for a T2 were recorded:
- Vouzela (Viseu): +52% — from €362 to €551
- Amares (Braga): +33% — from €410 to €546
- Monchique (Faro): +28.9% — from €516 to €665
- Aljustrel (Beja): +28.1% — from €544 to €697
- Porto de Mós (Leiria): +25.1% — from €411 to €514
In total, 180 of the 206 municipalities analyzed (87%) rose above the legal limit of 2.24%. The most notable exception was Madeira, the only district with a decrease (−4.9% for a T2).
Where renting continues to cost the most
At the top of the absolute values remain the usual suspects — but with moderate increases, a sign of a market that is already stretched: Lisbon (€1,491 for a T2, +3%), Cascais (€1,358, +3.1%) and Funchal (€1,263, +3.4%). The big exception is Sines (€1,242, +13.1%), driven by demand linked to industrial and logistics investment.
The takeaway is clear: rental pressure is shifting from consolidated centers, which are already at their limit, to the outskirts and the interior — precisely where many landlords still charge outdated rents.
What this means for you, the landlord
If you have a rented property, here are three practical takeaways:
- Your rent may be well below market value. If the contract is a few years old and only the legal coefficient was applied, the difference compared to a new contract can be in the double digits. Check the reference value for your property in the Rental Market Simulator.
- You cannot simply raise the rent. For active contracts, the limit is the annual coefficient (2.24% in 2026), communicated in writing with 30 days’ notice — see how to do it. Convergence with the market only happens at the end of the contract or by mutual agreement.
- A new contract is an opportunity — and a risk. Higher rents attract applicants who must make a greater financial effort to pay. Before signing, check the tenant’s solvency and formalize everything in an NRAU-compliant contract.
View the full data
The complete table by district, the 15 municipalities with the highest increase, and the analysis by property type are in the Aluseg Rent Index, updated periodically. The data is free to use for editorial purposes with citation. Analyses by city: rental prices in Lisbon · median rent in Porto · Braga · Coimbra · Faro (Algarve).
Source: Aluseg Rent Index (INE, housing rents 2024 and 2025), 42,037 records. Values refer to the T2 property type.
