Rental Contracts Increase by 19.4% in the Last Quarter of 2020

The number of new rental contracts increased by 19.4% quarter-on-quarter, while rental prices also rose, albeit at a slower pace.

According to a study, Housing Rents Statistics, published by the National Statistics Institute (INE), the average value of new rental contracts rose by 3.8% in the 4th quarter of 2020, down from 5.2% in the previous three months. However, the increase in the number of new rental contracts (+19.4%) surpassed the figure in the third quarter of 2020 (+10.7%).

Average rents fell in 15 of the 24 municipalities with over 100,000 inhabitants. The cities of Lisbon (-9.1%), Oeiras (-8.1%), Porto (-7.7%), Cascais (-3.7%) and Amadora (-2.7%) stood out, with a higher number of new rental contracts, while average rents fell.

There was also a drop in the y-o-y change in median rents in 18 of the 24 municipalities with more than 100,000 inhabitants in the fourth quarter compared to the third. The reductions were more severe than the national average (-1.4%) in 14 municipalities, with Santa Maria da Feira (-14.2%), Gondomar (-12.8%) and Coimbra (-11.3%) standing out, as well as Sintra (-7.2%) and Porto (-6.0%).

The average rent for the 22,029 new residential rental contracts in Portugal reached €5.77/m2 in the last three months of 2020. This figure represents a y-o-y increase of more than 3.8%, below the previous rise in the third quarter (5.2%).

The INE added that the number of new rental contracts in the country increased by 19.4% y-o-y in the fourth quarter of 2020 compared to the same period during the previous year (+10.7%). The average value of rents decreased y-o-y in the fourth quarter of 2020, with reductions ranging from (-4.7%) in Coimbra to (-0.4%) in Aveiro. The sub-regions with median rents above the national level were the Lisbon Metropolitan Area, the Algarve, the Porto Metropolitan Area and the Autonomous Region of Madeira.  The Autonomous Region of Madeira registered a year-on-year decrease in rental values (-1.1%), while the Upper Alentejo region posted the greatest increase in median rents (+28.5%).

It is also worth noting that the municipality of Lisbon reported the highest number of rental contracts in the country, A total of 7,968 new agreements were signed in the last 12 months, an increase of 18.6% y-o-y. Porto (3,700), Sintra (2,822) and Vila Nova de Gaia (2,619) were also noteworthy.