Explore the booming student housing investment sector in Portugal, where increasing demand continues to outpace supply. Learn why international investors are drawn to this maturing market and how rents are set to rise by 9% this school year, signaling significant growth and opportunity in student accommodation across Portugal.
Portugal’s student housing market continues to attract international attention in 2024, with robust demand, rising rents, and strong opportunities suggesting significant room for growth—especially in Lisbon and Porto. According to Cushman & Wakefield’s latest “Purpose Built Student Accommodation (PBSA)” report, student residences in Portugal are experiencing a persistent supply-demand imbalance, driving prices higher and positioning the sector as a hot spot for both domestic and global real estate investors.
Student Accommodation in Portugal: Key Market Insights
Despite an 8.5% rise in the number of student beds in Lisbon and Porto—adding about 1,500 new spots—both cities still lag behind the European average bed-to-student ratio of 12%. This school year alone, student accommodation rents are projected to rise another 9%, underlining just how severe the shortage has become.
Why Such High Demand for Student Housing in Portugal?
- International Appeal: Portugal’s top universities are increasingly prestigious, attracting international students via academic mobility programs and the country’s overall quality of life.
- Severe Housing Shortages: Portugal’s property market, especially in Lisbon, is under pressure. With families and students alike competing for the same rental inventory, dedicated student housing is at a premium.
- Growth Outpaces Supply: Even with all planned public and private projects, neither Lisbon nor Porto is expected to reach even a 10% supply rate in the coming years.
Investment Fundamentals: Why Student Housing in Portugal Is a Smart Bet
- Rental Yields: Prime yields for PBSA assets are currently between 5.25% and 5.5%, slightly compressing but remaining attractive in comparison to other real estate segments.
- Investor Pricing: The average price per bed for new PBSA projects in Lisbon and Porto stands between €100,000 and €120,000.
- Rising Rents: In private PBSA projects, studios command between €650 and €1,500 per month depending on location and amenities—well above levels in public student accommodations.
- Sustained Transactions: Four significant investment deals closed in the last year across Lisbon, Porto, Covilhã, and Braga, despite structural challenges.
Price Comparison: Public vs. Private Student Housing in Portugal
- Public Residences: Single rooms rent for €253–€413/month, with shared rooms ranging from €170–€354 per bed. Studios are €588–€775/month.
- Private PBSA: Studios rent for €650–€1,500/month, reflecting premium services, facilities, and locations close to major university campuses.
Market Constraints and Opportunities
The expansion in student housing supply is limited by lengthy permitting processes, scarcity of suitable land, and delays/suspensions in public sector initiatives since 2020. In Lisbon, which houses twice as many students as Porto, development pace is expected to continue until at least 2028, although the demand gap will persist—especially as families increasingly occupy rental stock traditionally reserved for students.
By contrast, Porto’s supply is projected to increase by 2026 and then stabilize, but will still lag far behind actual student demand.
Portugal’s Student Housing: Outlook for 2025 and Beyond
Experts believe that Portugal’s student housing investment sector holds substantial upside for investors looking for high yields and long-term growth. The persisting mismatch between skyrocketing student numbers and limited supply of purpose-built accommodation means rental prices are likely to keep climbing, attracting further international capital.
Key Takeaways for Investors
- Portugal’s student housing sector is maturing rapidly, with Lisbon and Porto as primary investment destinations.
- Rents will keep climbing (9% increase expected this school year), buoyed by a severe shortage, rising international demand, and growing university appeal.
- Entry price per bed in Lisbon and Porto remains highly competitive—offering attractive yields and significant upside potential.
For real estate investors searching for promising sectors in Portugal, student housing presents a unique opportunity: stable yields, rising rents, and strong demand fundamentals, especially in Lisbon and Porto, make PBSA an attractive portfolio addition. With the supply shortage not likely to subside soon, those entering this market now are well-positioned to benefit from the continued growth and internationalization of Portugal’s higher education system.
