Portugal’s rents hit record high amid cost of living crisis

Reuters | March 29, 2023

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LISBON (Reuters) – Housing rents in Portugal jumped nearly 11% to a record high in the last quarter of 2022, official data showed on Wednesday, adding to the soaring cost of living.

Soaring prices of homes and rents, especially around the capital Lisbon, coupled with rampant inflation, high interest rates and low wages have prompted several protests in Portugal in recent weeks as strife has grown across Europe over the cost of living.

Data showed the asking price of new leases on houses and apartments jumped 10.6% year-on-year to a median of 6.91 euros ($7.49) per square metre, similar to an 11.3% spike in house prices reported last week – the biggest ever annual increase despite an economic slowdown and rising mortgage rates.

Although the data suggest that the appetite for property is still red-hot in Portugal, the National Statistics Office said on Wednesday the number of new lease contracts dropped 3.3%.

A protest is scheduled to take place in Lisbon and other cities on April 1 to demand affordable housing.

In the greater Lisbon area, rents reached 10.38 euros/m2, followed by 8 euros/m2 in the sunny Algarve region popular with British holidaymakers, the statistics office said.

Portugal is one of Western Europe’s poorest countries, with government data showing more than 50% of workers earned less than 1,000 euros ($1,055) per month last year.

Although inflation slowed slightly to 8.2% in February, prices of unprocessed food products surged by 20.11%.

($1 = 0.9222 euros)

(Reporting by Patricia Vicente Rua; Editing by Andrei Khalip and David Holmes)