The financial effort required to rent a house in Portugal rose to 83% at the end of 2024, two percentage points (p.p.) above the 81% recorded in the same period in 2023. When it comes to buying a house, the trend was the opposite: the national effort rate fell from 72% to 70% in December 2024, which may be related to the drop in interest rates on real estate credit.

Of the 20 cities analysed, it was in Viana do Castelo where the effort rate to rent a house increased the most in the last year, rising from 47% in the fourth quarter of 2023 to 57% in the same period of 2024, increasing by 10 p.p, according to a report by idealista.

Among the biggest increases in the effort rates to rent a house in the last year are Ponta Delgada (8 p.p.), Lisbon (4 p.p.), Setúbal (3 p.p.), Braga (2 p.p.), Coimbra (2 p.p.), Funchal ( 2 pp), Viseu (2 pp) and Aveiro (1 pp). In Guarda, Leiria and Porto the effort rate did not vary during this period.

On the other hand, the effort rate in housing rentals decreased in Faro (-11 p.p.), Beja (-10 p.p.), Évora (-7 p.p.), Bragança (-6 p.p.), Portalegre (-2 p.p.), Castelo White (-2 p.p.), Santarém (-1 p.p.) and Vila Real (-1 p.p.). This means that house rents have become less of a burden on the salaries of families living in these cities.

Lisbon and Funchal are the cities that require the greatest effort from families to rent a house, requiring them to spend 91% of their income. Next comes Porto (76%), Faro (76%), Setubal (65%), Aveiro (59%), Ponta Delgada (58%), Viana do Castelo (57%), Braga (56%), Évora (56%), Santarém (50%), Leiria (48%), Viseu (46%), Coimbra (44%) and Vila Real (40%).

The cities where house rents have the least impact on family income are Portalegre (31%), Bragança (32%), Beja (33%), Castelo Branco (34%) and Guarda (35%). It is worth highlighting that all district capitals, with the exception of Portalegre, Bragança and Beja, presented effort rates higher than the recommended 33%.

Property buying

The percentage of income that families must allocate to buying a house increased in six capitals out of the 20 analyzed. It was in Portalegre where the effort rate increased the most, rising from 18% to 22% (+4 p.p.). Next come increases in the effort rate in Setúbal (3 p.p.), Vila Real (3 p.p.), Santarém (1 p.p.), Ponta Delgada (1 p.p.) and Bragança (1 p.p.). In Guarda and Viseu, the effort rate to buy a house did not vary during this period.

On the other hand, a drop in the rate of effort to purchase homes was observed in 12 of the 20 cities analyzed. This may be related to the fall in interest rates on real estate credit throughout 2024, which offset the evolution of house prices. Idealista data thus reveals that the effort to buy a house decreased in Funchal (-13 p.p.), Porto (-10 p.p.), Viana do Castelo (-8 p.p.), Faro (-8 p.p.), Lisbon (- 8 pp), Évora (-7 pp), Braga (-6 pp), Leiria (-6 pp), Castelo Branco (-3 pp), Aveiro (-3 pp), Coimbra (-2 pp) and Beja (- 2 pp).

In the fourth quarter of last year, the cities with the highest rate of effort to buy a house were Funchal (102%) and Faro (101%). This means that the average household net income is not enough to pay for a home loan, which follows average characteristics in terms of duration and interest rate.

The weight of mortgage payments on salaries is also significant in Lisbon (95%), Porto (73%), Aveiro (69%), Ponta Delgada (63%), Viana do Castelo (57%), Braga (56%), Leiria (53%), Viseu (50%), Setúbal (50%), Coimbra (47%), Evora (45%), Vila Real (39%) and Santarém (35%).

It is also noted that there are five district capitals where it is possible to buy a house with a lower effort rate than the recommended one, of 33% (where the house payment weighs less than a third of the family's disposable income): Guarda (17 % ), Castelo Branco (19%), Portalegre (22%), Beja (22%) and Bragança (32%).