Housing in Portugal

Portugal’s marketed as affordable, but Lisbon and Porto now rank among Europe’s least affordable rental markets relative to local wages.

A genuine affordability crisis

Portugal spent the 2010s marketing itself as Western Europe’s bargain relocation destination — that era is over in the two big cities. Wages have not kept pace with rents driven up by tourism, short-term lets, remote-worker demand, and (until October 2023) Golden Visa-linked real estate investment. Lisbon was flagged in 2026 reporting as one of Europe’s least affordable capitals relative to local income, with rent now consuming an outsized share of the median local salary of roughly €1,300/month net.

What rent actually costs

Listing sites still show T1 (1-bedroom) apartments advertised from €600–€700 in Lisbon, but real-world availability at that price is scarce — realistic asking rent for a T1 in a normal Lisbon neighborhood now runs €1,000 or more, and central/riverside neighborhoods go considerably higher. Porto, once the budget alternative, has closed much of the gap: a T1 in central Porto now averages around €1,016/month. Smaller cities and inland towns remain meaningfully cheaper.

Deposits, guarantors and getting the lease

Standard practice is 1–2 months’ rent as deposit plus the first month’s rent paid in advance — effectively 2–3 months upfront. Landlords frequently ask foreign tenants without a Portuguese payslip history or local credit record for a fiador (guarantor, usually a Portuguese resident who co-signs the lease) or, in lieu of one, several extra months of rent paid upfront as security. Having a Portuguese employment contract, a strong bank balance, or engaging a relocation agency to vouch for you can substitute for a fiador in many cases, but expect this to be one of the more frustrating parts of house-hunting as a newcomer.

Setting up utilities

Electricity (EDP or a competitor), water (municipal), gas, and internet/broadband are typically set up separately, each requiring your NIF and lease contract. Expect combined utilities (excluding internet) of roughly €100–€180/month for a small apartment depending on heating/cooling needs — Portuguese buildings are often poorly insulated, so winter electricity bills for heating can spike noticeably in the north and interior.