The economic climate is becoming more demanding for anyone looking to buy a home. Households are seeing their purchasing power shrink amid rising inflation, high house prices and increasing interest rates. The effect is showing in transactions.

Portugal’s rental market continues to face strong demand pressure, which is why supply is still falling and rents have risen again.

Today, families face the significant challenge of acquiring housing without the expenses becoming an excessive burden on their budget, in order to maintain their quality of life. This is why they have been seeking homes in the outskirts of large cities, such as Lisbon and Porto, where housing prices are lower. This trend has intensified, as 30 of the 50 most sought-after municipalities for buying a house in Portugal have median prices below €300,000, according to data from the second quarter of 2026 from idealista (publisher of this newsletter). Santarém, with 14 municipalities in the top 50, is the most represented district. The Alentejo and Beiras regions concentrate a large portion of the most affordable prices.

There are fresh developments on the rental reform that completes the wider package of measures aimed at tackling Portugal’s housing access crisis. The Government approved a set of changes in the Council of Ministers on Thursday, 9 July, affecting both new tenancy agreements and older contracts

In the short term, attention is firmly on the rental market as a way of easing the housing access crisis in Portugal. As part of efforts to increase the supply of homes available, the Government is keen to give landlords more incentives to rent out their properties, including reducing the IRS (personal income tax) to 10% under the new tax package and speeding up eviction procedures in cases of unpaid rent.