Incomes suffer the biggest increase in four years and reach a new high in 2023 | Housing

The increase in housing rents accelerated again at the end of last year and prices reached yet another historic high. The growth, of almost 11% – the sharpest in four years – is recorded in a year in which there was once again an increase in the number of new rental contracts, after a period of contraction.

The data, released this Thursday, are from the National Statistics Institute (INE), which indicates that, in 2023, the median value of rents for new rental contracts for family accommodation was 7.21 euros per square meter, the which represents an increase of 10.58% compared to the previous year. Since 2019, when rents had increased by 10.8%, there has not been such a sharp increase in these prices.

In recent years, rents have maintained growth, but at a slower pace, with percentage variations below double digits having been recorded in the three years prior to 2023. Last year, however, growth was once again faster, despite efforts which were made by the Government of António Costa to lower housing costs.

It was in 2023, remember, that Mais Habitação was launched, a legislative package created to respond to the housing crisis and which brought a series of measures aimed at increasing supply and lowering prices. Among them is the new limit on rent increases, which established that rents defined in new lease contracts may be, at most, 2% higher than those established in previous contracts relating to the same houses.

Mais Habitação only came into force in October last year, but, for now, its effects on the rental market are few: even considering only the fourth quarter of 2023, the median value of rents for new contracts increased by 11.6 % compared to the same period in 2022 and 6.6% compared to the previous quarter, which could be a reflection of the difficulties in applying the limits that were created.

Even so, the market grew again and, in 2023, 94,553 new housing rental contracts were signed, an increase of around 2% compared to 2022. This, after a few quarters, at the end of 2022 and beginning of 2023, when the market was contracting.

The upward trend in rents was transversal to most of the national territory. In 2023, price drops were only recorded in 11 municipalities, while in another 107 municipalities not enough data was collected to be able to make an annual comparison. Rents thus increased in at least 190 of the 308 municipalities in Portugal, with double-digit increases in most of them.

In total, there were 38 municipalities where the median value of rents from new contracts was higher than the national value, with Lisbon at the top. In the capital, rents stood at a median value of 15.22 euros per square meter in 2023, an increase of more than 18% compared to the previous year and the first time that the threshold of 15 euros per square meter was exceeded in Lisbon . This is, in fact, the only municipality in the country where the median income exceeds this value.

In the parish of Santo António, the most expensive in Lisbon, the median rent reached 19.44 euros per square meter last year, an increase of 19% compared to 2022. The parish of Misericórdia recorded the greatest growth: in one year, rents from new contracts increased by more than 30% and stood at a median value of 18.94 euros per square meter.

There were also accelerated increases in Porto, with the median value of rents increasing by more than 17% in this municipality, standing at 11.72 euros per square meter in 2023. The Union of Parishes of Aldoar, Foz do Douro and Nevogilde presented the highest prices in this municipality, at 13.78 euros per square meter, while the highest annual increase, of 21%, was recorded in the Union of Parishes of Lordelo do Ouro and Massarelos.

Prices rise again in big cities

During the period under review, large cities once again registered an acceleration in price increases, which continue to distance themselves from the values ​​seen in the rest of the country.

The median value of rents recorded in the group of 24 municipalities with more than 100 thousand inhabitants stood at 10.31 euros per square meter at the end of the fourth quarter of 2023 (for this group of municipalities, INE only provides quarterly data, and not annual), which corresponds to an increase of 5.6% compared to the previous quarter and 12.8% compared to 2022, a higher variation than that seen at national level.

The biggest increases, all greater than 20%, occurred in the municipalities of Funchal (where prices increased by 23%), Setúbal (with an increase of 21%) and Vila Franca de Xira (where growth was 20.3% ). There was no large city where median rent values ​​fell in the fourth quarter compared to the same period last year.