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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 property type based on 42 thousand records (primary source: INE). This article summarizes the essentials and shows where rents increased the most.
The number that matters: 7.4% vs. 2.24%
There are two rents in Portugal, and they are diverging. Rents for active contracts can only increase by the legal coefficient — 2.24% in 2026. Rents for new contracts, freely set in the market, rose by 7.4% in a single year. The result is a ‘turnover premium’: a property re-rented 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 property types: 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 something new: after rising non-stop throughout 2025, the urban market showed its first sign of cooling down. In the 24 urban municipalities analyzed, the median rent for a T2 remains about 7.7% above the same period in 2025 — but in 15 of those 24 municipalities, rent decreased compared to the previous quarter. Loures (−7%), Barcelos (−5.9%), and Cascais (−5.1%) lead the declines in the periphery.
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 are stopping their increase (or falling) on the outskirts of major metropolitan areas, while central Lisbon continues to pull upward. See the full table of the 24 municipalities, with year-over-year and quarterly variations, in the Aluseg Rent Index.
Where rents have risen the most
Growth was not led by the major cities — it was in the interior and medium-sized municipalities that the highest year-over-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 analyzed municipalities (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 more
At the top of the absolute values, the usual suspects remain — but with moderate increases, a sign of an already stretched market: Lisbon (€1,491 for a T2, +3%), Cascais (€1,358, +3.1%), and Funchal (€1,263, +3.4%). The major exception is Sines (€1,242, +13.1%), driven by demand linked to industrial and logistical investment.
The takeaway is clear: rental pressure is shifting from consolidated city centers, which are already at their limit, to the periphery and the interior — exactly where many landlords are still charging outdated rents.
What this means for you, as a landlord
If you have a rented property, here are three practical conclusions:
- Your rent might be significantly below market value. If the contract is a few years old and you have only applied the legal coefficient, the difference compared to a new contract could be double digits. Check the reference value of your property in the Rental Market Simulator.
- You cannot simply raise the rent. For ongoing contracts, the limit is the annual coefficient (2.24% in 2026), communicated in writing with 30 days’ notice — see how to do it. Market convergence 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 stretch their budget more 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 typology are in the Aluseg Rent Index, updated periodically. The data is free to use for editorial purposes with proper citation.
Source: Aluseg Rent Index (INE, housing rents 2024 and 2025), 42,037 records. Values refer to the T2 typology.
