More rooms in Portugal’s housing market, but also higher prices

It looks like demand still overtakes supply maintaining this state of affairs in the Iberian country

Renting a single room in a shared flat or a house has become an increasingly popular housing option in the tense housing markets of European cities. These days, it’s not just students who are the main customers in this market but also newcomers to the cities, youth who have just moved out of their parents’ place and are seeking economic emancipation.

In that context, the property website Idealista has published a study on the overall situation of the rental room market in Portugal that shows both positive and negative trends. On the plus side, there’s an increasing supply of single rooms (although not in all cities), but on the other hand, the price of said rooms has also gone up compared to the previous year.

Some cities, some numbers

If your mind goes to the largest cities when it comes to expensive rooms, you wouldn’t be mistaken. In the Portuguese capital Lisbon, an average room will set you back around 550 euros per month, a number followed by Porto with 445 euros per month. The third spot, however, is shared by the capital of the autonomous region of Madeira, Funchal, and the largest city of the Algarve, Faro, where an average room costs 400 euros.

In terms of relative increase, however, it’s the Madeiran capital that takes the cake. Compared with last year, rooms in Funchal are 60% more expensive in 2024. This is where the housing shortage is most pronounced as well in the entire country. There are 73% fewer advertisements for rooms to rent in Funchal than there were in 2023.

The greatest opening in that segment of the housing market in the Iberian country has been observed in the city of Castelo Branco located in the rural backcountry near the border with Spain, where new residents could experience a slice of authentic Portuguese life. The rise in advertised rental rooms is 112% compared to the previous year.