Access to housing in Portugal continues to worsen, as house prices rise far more quickly than family incomes. Although rental price growth is slowing — rising by 3.5% year‑on‑year in Q2 2025 — this was enough to push the financial burden required to rent a home in Portugal up to 83%, one percentage point above the 82% recorded at the same time in 2024. Meanwhile, for home purchases, the national effort rate remained stable at 71% over those two periods, possibly reflecting a balancing between the 8% increase in housing prices over the last year and the decline in mortgage interest rates, suggests the latest analysis from Idealista.

Rental Effort Rate Surges in Faro — But Falls in Lisbon and Porto

Among 20 cities analysed, Faro recorded the largest increase in rental effort, rising from 70% in Q2 2024 to 90% in Q2 2025 (an increase of 20 p.p.).

Significant hikes in rental effort rates were also found in Ponta Delgada (+15 p.p.), Guarda (+4), Funchal (+3), Braga (+2), Aveiro (+2), Leiria (+1), and Viseu (+1). In Bragança and Castelo Branco, the rental effort rate was unchanged over the period.

By contrast, rental effort fell in Beja (−8 p.p.), Santarém (−7), Portalegre (−4), Lisbon (−3), Setúbal (−3), Viana do Castelo (−3), Évora (−2), Coimbra (−2), Porto (−1), and Vila Real (−1).

After Faro (90%), Funchal requires the greatest financial effort from families to rent a home — 89% of income. Other cities with high rental burden in spring 2025 include Lisbon (83%), Ponta Delgada (75%), Porto (71%), Setúbal (58%), Braga (55%), Viana do Castelo (55%), Aveiro (53%), Évora (50%), Leiria (49%), Santarém (48%), Viseu (44%), Coimbra (42%), Bragança (39%) and Vila Real (37%).

Cities where rental costs weigh least on family incomes are Castelo Branco (34%), Guarda (34%), Beja (35%) and Portalegre (35%). All major cities analysed presented effort rates above the recommended threshold of 33%.

Housing Purchase: Lower Financial Stress in 12 Major Cities

The proportion of household income needed to buy a home using a mortgage rose in six district capitals among the 20 analysed:

  • Setúbal increased from 49% to 55% (up 6 p.p.)

  • Santarém (+4)

  • Ponta Delgada (+3)

  • Lisbon (+2)

  • Aveiro (+1)

  • Guarda (+1)

In contrast, purchase effort dropped in:

  • Funchal (−14 p.p.)

  • Vila Real (−14)

  • Faro (−10)

  • Bragança (−10)

  • Porto (−8)

  • Viseu (−7)

  • Leiria (−7)

  • Castelo Branco (−4)

  • Braga (−3)

  • Portalegre (−2)

  • Viana do Castelo (−1)

  • Beja (−1)

In Q2 2025, cities with the highest purchase burden were:

  • Lisbon (108%)

  • Faro (96%)

  • Funchal (96%)

  • Aveiro (72%)

  • Porto (69%)

  • Ponta Delgada (66%)

  • Braga (59%)

  • Setúbal (55%)

  • Viana do Castelo (54%)

  • Leiria (50%)

  • Coimbra (47%)

  • Évora (46%)

  • Viseu (45%)

  • Santarém (36%)

Only six cities allowed purchases with less than the recommended 33% of income spent on mortgage payments: Vila Real (27%), Beja (23%), Portalegre (22%), Bragança (22%), Guarda (17%), and Castelo Branco (17%).

Effort Rate Trends by Region

In July, rental prices rose in all regions. The highest increases were seen in:

  • Azores (16.3%)

  • Center (12.2%)

  • Alentejo (10.6%)

  • Algarve (9.9%)

  • Madeira (5%)

  • North (3.6%)

  • Lisbon Metropolitan Area (1.9%)

The Lisbon Metropolitan Area continues to be the most expensive region to rent — €19.6/m² — followed by the Algarve (€15.8/m²), the North (€14.6/m²), and Madeira (€14.3/m²). Conversely, the Azores, Center, and Alentejo remain the most affordable.

Methodology Overview

Idealista analysed changes in effort rates between Q2 2024 and Q2 2025, both for renting and buying.

  • Rental effort rate is calculated as the percentage of average net household income spent annually on rent. Rental prices come directly from Idealista listings, while net household income is sourced from the National Statistics Institute (INE).

  • Mortgage purchase effort rate is the percentage of net household income required annually to service a typical mortgage based on average loan duration and interest rate. Recently, due to lower interest rates, the calculation was updated using data from the European Central Bank (ECB).