Portugal Rents Expected to Rise 2.16% in 2025

Explore the potential for Portugal rents to rise by 2.16% in 2025, with possible increases up to 11.1% due to updated landlord coefficients.

In the realm of rental economics, projections indicate a potential increase of 2.16% in rents come 2025. However, this seemingly modest uptick could morph into a more substantial rise under certain circumstances. Specifically, should a landlord opt to maintain the status quo of the rent for an extended period, they may subsequently invoke the coefficients derived from the preceding three years. This could culminate in a staggering increase of approximately 11.1%.

Recent data released by the National Statistics Institute (INE) on average inflation—excluding housing—has shed light on this impending scenario. As of January 2025, rents, including those established prior to 1990, are poised for a 2.16% adjustment, marking a full year since the last recalibration. Notably, this figure represents merely a third of the 6.94% adjustment that was enacted in 2024, a year that bore witness to the highest rental increase in three decades, largely attributable to the prevailing inflationary climate.

To provide context, the previous year saw a more restrained update of 2%, a figure that was artificially constrained by governmental intervention; absent this measure, the increase would have soared to 5.43%. In a landscape already characterized by elevated rental prices, the projected 2.16% hike translates to an additional 18.36 euros for a tenant currently paying 850 euros monthly.

However, the narrative does not end there. Should a landlord have refrained from adjusting the rent in recent years, the cumulative effect of the last three coefficients—1.0200, 1.0694, and 1.0216—could yield a more pronounced increase. For instance, a stagnant income of 850 euros could see an aggregate rise of 97.20 euros, elevating the monthly rent to a striking 947.20 euros.

Legally, landlords retain the prerogative to update rents based on the coefficients from the previous three years, a stipulation that underscores the importance of timely adjustments. Furthermore, under the Mais Moradia law, rents established prior to 1990 are also eligible for updates in accordance with the average housing inflation coefficient recorded in August. This provision allows for a 2.16% increase, provided that more than 12 months have elapsed since the last adjustment, a stark contrast to the previous year's 6.94% increase.

The landscape of rental increases is fraught with complexities and potential surprises, underscoring the necessity for both landlords and tenants to remain vigilant and informed in this ever-evolving economic environment.