Looking to rent in Portugal? Learn why Lisbon and Porto are no longer the most sought-after rental areas in 2025, discover which nearby municipalities are now in highest demand, and find out where to secure the most affordable rental homes across the country.
Highest Rental Demand in Portugal: The Suburbs Lead the Way
The rental landscape in Portugal is shifting. While Lisbon and Porto have long been considered magnets for tenants, the latest data from idealista for the second quarter of 2025 reveals a surprising trend: the greatest demand for rental homes is now focused on municipalities surrounding these two major cities, rather than within them. Lisbon and Porto themselves no longer feature in the top 50 most sought-after municipalities for renting—ranking only 65th and 81st, respectively.
Why Aren’t Lisbon and Porto in the Top 50 for Rental Demand?
Despite Lisbon and Porto offering the largest supply of rental properties in Portugal—with nearly 15,000 units in Lisbon and 10,000 in Porto—the pressure of demand is more evenly spread. This abundance of available rentals means there’s less competitive tension per listing, even as overall interest remains strong.
Another major factor is price. Lisbon boasts the highest average rent in Portugal at €1,751 per month—pushing many families and young professionals to look for more affordable accommodation in nearby towns. In contrast, Porto’s average monthly rent is €1,216, still significantly higher than its neighboring municipalities.
Where Is Demand the Highest?
Top places now attracting renters are those with both proximity to urban centers and more budget-friendly options:
- Barreiro
- Vila Franca de Xira
- Amadora
Each of these municipalities offers average rents at or below €1,200 per month, making them far more accessible than Lisbon or Porto themselves.
Similarly, around Porto, municipalities like:
- Paredes (€968)
- Penafiel (€760)
- Gondomar (€1,005)
- Maia (€1,012)
- Valongo (€1,026)
are becoming highly sought after, offering quality of life near the city without the premium city-center prices.
The Geography of Rental Demand
Out of the 50 most in-demand municipalities for renting in Q2 2025, Greater Lisbon alone accounts for 15 of them, confirming the continued popularity of the capital’s outskirts. As we move down the list, we see greater diversity, with several municipalities near Porto and Faro also drawing attention, alongside destinations from north to south and on the islands.
Where Are Rentals Cheapest?
Affordability is a strong magnet for renters. While most of the top 50 municipalities have average rents above €1,000 per month, there are still bargains:
- Covilhã: €582/month (29th in demand)
- Bragança, Chaves, Castelo Branco, Figueira da Foz have average rents below €750/month.
At the upper end, some locations exceed €1,500/month, such as Palmela, Albufeira, Lagos, Sintra, Oeiras, Funchal, Faro, and Olhão—often reflecting either strong tourism markets or upscale residential demand.
What’s Behind the Shift in Rental Demand?
Rising rents in Lisbon and Porto, combined with more affordable suburban options, are driving tenants outward. This may be further intensified by the cooling rental market in 2025: the purchase market is becoming more attractive due to lower interest rates and new support measures for young buyers.
Lisbon and Porto may still be the heart of Portugal’s supply of rental homes, but the real action is now happening in the surrounding municipalities. If you’re looking to rent in Portugal in 2025, keep an eye on suburban areas near these urban centres for better-value options, less competition, and growing popularity. As the market continues to cool and shift, these municipalities are set to remain hotspots for tenants seeking the right balance between affordability and location.
