Rent costs on the decline?
In a recent press release, Ricardo Guimarães, director of Confidencial Imobiliário, shared insights into the current rental market trends in Lisbon, Porto, and São Paulo. According to the Residential Rent Index, the three cities are experiencing a cooling or decline in rents.
Lisbon has seen a 3.4% year-on-year decrease in rents for lease agreements signed in Q2 2025 compared to Q2 2024. Despite a slight quarterly recovery in Q2 2025, rents have generally been falling after a period of rapid growth, due to an increase in rental supply easing demand pressures.
Porto continues to see rental prices decrease, with rents recording a 0.7% decline year-on-year in Q2 2025, marking the third consecutive quarter of falling rents. Similar to Lisbon, this is driven by an increased supply of rental homes since mid-2023.
São Paulo also recorded the largest annual drop in rents over the last four years. After a small quarterly increase of 0.7% in Q2 2025, rents had fallen 2.7% in Q3 2024 and 1.5% in Q1 2025, showing an annual downward trend despite short-term fluctuations.
Meanwhile, property sale prices in Portugal overall continue to rise significantly, with a reported 18.1% year-on-year increase in median housing market appraisal values as of June 2025. This indicates ongoing structural demand in real estate markets.
The following table summarizes the rental price trends and quarterly changes in each city:
| City/Region | Rental Price Trend (Year-on-Year) | Quarterly Rental Change Q2 2025 | Notes | |-------------|----------------------------------|---------------------------------|-------| | Lisbon | -3.4% | Slight quarterly increase (+0.7%) | Cooling market, increased rental supply | | Porto | -0.7% | Decreasing rents for 3rd consecutive quarter | Supply increase drives price falls | | São Paulo | Largest annual drop in 4 years | Q2 2025: +0.7%, but prior quarters negative | Overall annual decline | | Portugal (general, sales prices) | Not rental, but +18.1% in housing appraisal values | N/A | Indicates rising property values despite rental cooling |
In a natural market adjustment, with more supply, there is less pressure on demand in both Lisbon and Porto, causing rents to fall. Ricardo Guimarães, director of Confidencial Imobiliário, commented on the market situation, stating that the trend of decreasing rents continues quarterly in the city of Porto. The press release also revealed information about the rental market situation in both Lisbon and Porto.
Investors may find an opportunity in the cooling rental market of Lisbon, Porto, and São Paulo, as a decrease in rents has been observed year-on-year in all three cities. This trend, caused by increased rental supply, has lessened demand pressure and could lead to potential investment opportunities in the housing-market and real-estate scene. In a natural market adjustment, the growing supply of rental homes is contributing to the decline in rents in both Lisbon and Porto.
