The data is shared by Confidencial Imobiliário, within the scope of the Residential Rents Index, which monitors the behaviour of rents established in new housing lease contracts.
The strong increase recorded since last summer reflects a cycle of steep increases in the past three quarters. Already in the 3rd quarter of 2022, rents for new contracts were 10% above the previous quarter in both Lisbon and Porto, an unprecedented quarterly variation, in what must have been an immediate reaction by landlords to the Government's announcement that rent updates in 2023 they would have a maximum ceiling of 2.0%. The 4th quarter confirmed the defensive posture of owners in anticipating future losses through new contracts, with a chain variation of 6.0% in Lisbon and 8.0% in Porto. At the beginning of 2023, already under the knowledge of the public program “Mais Habitação”, the new rental contracts for housing once again practiced higher rents than in the previous quarter, with a new increase of 6.0% in Lisbon. In Porto, the quarterly rise was more contained, standing at 2.0%.
“While it is a fact that rents in Lisbon and Porto have already been recovering since the end of 2021 after almost two years of contraction, the truth is that there has been an especially strong increase since last summer and that this coincides with the announcement of that updating values would be administratively limited. This measure seems to have aggravated the owners' lack of confidence in this market, at the same time that it has made it less attractive, as the expected increase does not even cover inflation. The 1st quarter of this year consolidated this scenario, with the disclosure of the Mais Habitação package further eroding confidence, which is visible both in the increase in rents and in the reduction of supply that reaches the market”, notes Ricardo Guimarães, director of Confidencial Real estate.
According to SIR-Arrendamento, the average rent practiced in new lease contracts in Lisbon reached €18.2/m² and in Porto €14.0/m², translating average rents per dwelling of €1,480 in the case of Lisbon and €1,064 in Porto.