Porto and Lisbon are Portugal's best cities to live in

In these cities you can earn more, but they also have higher unemployment, according to an idealista/data report.

Portugal's most attractive cities
Portugal's most attractive cities / Gtres
24 March 2021, Redaction

The cities with the highest household income are, due to certain factors, considered the most attractive to live in, but they are also the ones with the highest unemployment rates. This is the case for Portugal's 2 main cities, Lisbon and Porto. This is one of the conclusions to be drawn from the Residential Market Annual Report for 2020 in Portugal, recently published by idealista and based on data from INE, Pordata, IEFP and idealista/data. Let's see why Porto and Lisbon are the best cities to live in Portugal from this data. 

In 2019, the average household income in Portugal was 26,170 euros net, and there are, as expected, large differences depending on the different areas of the country, with "wealth being concentrated in a few districts". The report adds that "inland regions are generally where household income is lowest, highlighting a clear division between coastal and inland regions".

The district capital cities where average household income is highest in Portugal, higher than 26,170 euros which is the national average, are: Lisbon (37,979 euros), Funchal (36,678 euros), Faro (33,087 euros), Porto (32,818 euros), Vila Real (32,016 euros), Viana do Castelo (30,445 euros), Ponta Delgada (28,922 euros) and Braga (28,652 euros).

On the other hand, Porto and Lisbon are the district capitals where the unemployment rate is also highest: 11.3% and 10.4% respectively, according to data for January 2021. In other words, this was already in the middle of the COVID-19 pandemic. Setúbal, Vila Real and Faro, in that order, complete the top 5.

The Residential Market Annual Report for 2020 in Portugal allows then to conclude that, as mentioned above, cities that have a higher household income are more attractive to the population, despite having a higher unemployment rate. According to the report, it is possible to group the cities/district capitals into four categories: Attractive Areas, Driving Forces, Stable Areas and Stragglers.

idealista data

Attractive cities are those "which have a population increase above the national average, but which are characterised by a high unemployment rate. They are considered attractive areas. There are only 2 cities that fit these characteristics: Porto and Lisbon, which have the household income figures and unemployment rates that are also high", reads the report. 

With regard to the district capitals classified as Driving forces, "their population grows faster than the national average and their unemployment rates are lower than the national average. These dynamic areas are centres of attraction for the population and their capacity to generate employment. Among the district capitals, Aveiro stands out (with the highest population variation rate)", says the report. 

The Stable district capital cities are "economically active", have "unemployment rates below the national average", but "continue to lose population", as for example Portalegre. 

Finally, the district capitals considered as stragglers are those that "are losing population relative to the average, while at the same time unemployment rates are high. Setúbal stands out as having one of the highest population losses along with one of the highest unemployment rates".

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