Short-term rentals in Portugal: supply is at an all-time high and prices are rising

There are those who rent a house in Portugal to spend just a few months working, studying or exploring tourist attractions. We are talking about short-term rentals, which have become increasingly popular in our country. This is because the supply of houses to rent under this scheme is at its highest level in recent years and interest continues to rise, in a market that complements Local Accommodation and even long-term residential rentals.

Short term rentals are not intended for permanent housing, is generally for less than a year and is covered by the New Urban Rental Regime. It is, therefore, an alternative scheme to Local Accommodation and long-term residential rentals, and has been attracting increasing interest from property owners.

The most recent data shows that there were 3,599 properties available for rent in this way at the end of 2024, the highest number recorded in the available series that goes back to 2017. And the stock of temporary rentals is 50% higher than that observed at the end of the previous year, which can be explained by the legislative instability felt in Local Accommodation in the last year, as well as by the search for an alternative that aims to optimize the financial return on housing.

Especially because the demand for houses to rent for a season - longer than just a few days to visit or longer to live - continues to be significant in the country. What has been felt in Portugal is that the demand for temporary rentals is more dispersed due to the high supply of houses in this regime, a phenomenon that is reflected in a 28% drop in interactions per house advertised in the last year. It is also worth noting that demand is 65% above pre-pandemic levels (end of 2019), having peaked in the summer of 2022.

Given this dynamic between supply and demand, prices for houses in temporary rentals have stabilised upwards throughout 2024, having settled at 17.6 euros per square metre (euros/m2) at the end of last year. In fact, last spring, rents for houses in this regime even reached a record high of 18.4 euros/m2, according to the same data.

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Source: Idealista