Explore how Lisbon and Porto defy the rising rent trend in Europe, highlighting unique opportunities in Portugal’s real estate landscape.
The HousingAnywhere International Rent Index for Q4 2024 has unveiled a rather intriguing narrative in the realm of European rental markets. While the continent as a whole experienced a 3.1% uptick in rental prices compared to 2023, the growth rate for the fourth quarter was notably the lowest observed in recent years. However, Portugal’s vibrant cities of Lisbon and Porto have chosen to dance to a different tune, diverging from this overarching trend.
HousingAnywhere, a prominent European medium-term rental platform, meticulously analyzed rental data from over 78,000 furnished apartments—spanning one to three rooms, as well as rooms and studios—across 28 cities in 12 European nations. The findings revealed that, while the prices for furnished apartments, bedrooms, and studios across Europe surged by 3.6%, 2.6%, and 2.9% respectively, Portugal’s rental landscape told a contrasting story. In fact, when juxtaposed with the third quarter of this year, there was a notable decline in prices by 1.6%.
Throughout 2024, rental prices exhibited an upward trajectory; however, the growth rate recorded in the fourth quarter (3.1%) was the most subdued in recent memory. As 2024 draws to a close with a diminished rate of price escalation compared to preceding years, the specter of affordable housing looms large, presenting a formidable challenge for European governments as they navigate the complexities of 2025. The scarcity of affordable housing serves as a significant impediment to the aspirations of families, students, and young professionals seeking new opportunities. Thus, 2025 must herald a concerted effort towards innovative housing solutions.
One of the salient conclusions drawn from this study is the peculiar phenomenon observed in Lisbon and Porto, where apartment prices have actually dipped, in stark contrast to the upward trajectory witnessed in other European locales. In the fourth quarter of 2024, while furnished apartment prices across Europe climbed by 3.6%, Portugal’s rental market exhibited a retreat from this growth trend. Currently, the rental value of a furnished apartment in Lisbon hovers around €1,650, reflecting a 2.9% decrease from the previous year and a more pronounced 5.7% drop compared to the preceding quarter. Porto, on the other hand, showcases even steeper declines, with rental prices averaging €1,100—translating to a 4.3% decrease from 2023 and a staggering 25.7% plunge from the last quarter.
In the broader European context, cities such as Stuttgart (€1,890) and Frankfurt (€1,700) in Germany have recorded the most significant price increases, with growth rates soaring to 26.4% and 22.3%, respectively. Rotterdam (€1,950) in the Netherlands also witnessed a notable 22.3% rise. Conversely, in neighboring Spain, rental prices escalated by 12.7% in Valencia (€1,465) and 7.7% in Madrid (€1,616), while remaining stable in Barcelona (€1,550). Italy, too, saw a general upward trend in apartment prices, with the exception of Bologna (€1,695), which experienced a 3.3% decline, while Turin (€1,100) surged by 15.8%.
In tandem with apartment prices, room values across Europe have also seen an increase of 2.6% compared to the previous year. Yet, Portugal’s rental market has exhibited a more stable trajectory, with room prices remaining unchanged in Porto and experiencing a slight decrease of 2.3% in Lisbon. Currently, the average rental value of a room in Invicta stands at approximately €450, while in the capital, it is around €550. In the broader European landscape, German and Dutch cities command the highest room rents, with averages reaching €1,000 in Amsterdam and €890 in Hamburg. In contrast, Athens and Budapest offer the most economical options, with average room costs of €400 and €350, respectively.
Italy’s Bologna (€700) recorded the most significant increase in room rental prices, soaring by 16.7%, while Turin (€530), Rome (€620), and Florence (€600) also saw modest rises of 3.9%, 3.3%, and 1.7%, respectively. Spain’s room prices similarly escalated in the three cities analyzed, with Valencia (€410) and Madrid (€620) leading the charge with increases of 9.3% and 7.8%, respectively. In the Netherlands, Rotterdam (€825) experienced a 6.1% rise, largely attributed to restrictions on the supply of student accommodations. Germany, however, displayed a stark disparity, with Düsseldorf (€634) witnessing the largest increase (5.8%) while Cologne (€799) faced the most significant decrease (6.0%).
Following the trend observed in other property categories, studios also experienced a price increase of 2.9% compared to the previous year. However, the analysis of studios is limited due to the smaller number of cities included in the study. In Portugal, rental values for studios in Lisbon currently average around €1,150, reflecting a 9.5% increase, while Porto’s studios are priced at €900, representing a modest growth of 1.2%. Despite this annual increase, Porto experienced a dramatic decline of 18.2% compared to the last quarter. Spain, on the other hand, recorded some of the most significant price hikes, with Madrid (€1,200) and Barcelona (€1,105) witnessing increases of 21.2% and 16.3%, respectively. The most substantial price drops were observed in Valencia (€800) and Berlin (€1,210), which recorded decreases of 11.1% and 6.9%, respectively.
While the European rental market grapples with rising prices, Portugal’s Lisbon and Porto have charted a distinct course, presenting a fascinating case study in the dynamics of real estate economics. As we look ahead to 2025, the imperative for innovative housing solutions has never been more pressing.
