Rents are more expensive, but there are municipalities with affordable prices

Although the data isn't all exactly the same—particularly because the methodologies differ—there's one conclusion everyone has in common: rent prices in Portugal have risen in recent years, and not everyone can afford them.

According to data from the National Statistics Institute (INE), the median value of new rental contracts in Portugal in the first quarter rose to 8.22 euros per square meter, a 10% increase compared to the same period last year.

According to figures from idealista, price increases have been easing over the past few months, although they continue to occur. In June, for example, prices rose 3.5% compared to May. This growth was less significant than the previous month: 4.4%. Thus, renting a house now has a median cost of 16.7 euros per square meter at the end of June.

And it's important to remember that this market appears to be declining. The INE's findings also show that 23,417 new family rental contracts were signed in the first quarter, representing a 10.4% drop compared to the first quarter of last year. There's no record of such a sharp decline in this INE statistical series in the first half of 2020.

The cheapest municipalities

It's true that some municipalities are easier to buy a house, and idealista data shows this: Castelo Branco, Santa Maria da Feira, and Viseu dominate the list of cheapest municipalities. Of these three, Castelo Branco comes out on top. Here, the median asking price is €6.8 per square meter, making it the cheapest square meter in the country.

The ranking of the five cheapest municipalities is completed by Santa Maria da Feira (7.1 euros per square meter), Viseu (8 euros), Covilhã (8.1 euros) and Barcelos (8.3 euros).

But there are still other municipalities where it is possible to rent a house for less than 10 euros per square meter. They are: Vila Nova de Famalicão (8.4 euros), Santarém (8.8 euros), Leiria (8.9 euros), Lourinhã (9.1 euros), Viana do Castelo (9.2 euros), Figueira da Foz (9.3 euros), Caldas da Rainha (9.4 euros), Valongo (9.5 euros), Ílhavo (9.6 euros), Guimarães (9.6 euros) and Braga (9.8 euros).

All others are above this value. However, still below 11 euros per square meter, and completing the top 25 cheapest Portuguese municipalities for renting a house, are Gondomar, Maia, Póvoa do Varzim, Espinho, Torres Vedras, Alenquer, Nazaré, Alcochete, and Vila do Conde.

And the most expensive ones?

Idealista also researched the municipalities where it's most expensive to rent a house in Portugal, described by the platform as "the five most exclusive locations to rent a house in Portugal." Lisbon tops the list, costing €22.2 per square meter, making it the most expensive in the country. Next are Cascais (€20 per square meter), Porto (€17.7 per square meter), Loulé (€17.5 per square meter), and Oeiras (€16.8 per square meter).

Renting continues to be the solution for many

However, even though prices are rising, renting remains the option for many who cannot afford to buy a home, especially among younger people.

According to a recent study by Century 21 Portugal and Century 21 Spain, in Portugal, only one in three young people believe they will be able to buy a house in the coming years, with high prices (43%) and low incomes (30%) being the main reasons.

Therefore, the study reveals that "renting is the solution for many, but buying remains the objective," arguing that, "despite the difficulties, the goal of buying a home remains present. In Portugal, 32% of young people prefer to buy a home with a mortgage, although the majority (46%) opt for renting as a first step."