Coronavirus: lower rental prices in Portugal will not last long

This is according to Portugal's Secretary of State for Housing Marina Gonçalves who argues that accommodation owners are just waiting for tourism to pick up again.

Will rental prices rise in Portugal in 2021?
Will rental prices rise in Portugal in 2021? / Photo by Georgios Kaleadis on Unsplash
16 March 2021, Redaction

The price of houses for rent has been falling in Portugal during the pandemic, with a 3% drop in average national terms over the last year. The majority of the price reductions that are being seen in the rental market in Portugal during this pandemic period are a result of the times we are experiencing and are not likely to continue in the future. This is according to Portugal's Secretary of State for Housing Marina Gonçalves, who believes that when the tourism industry resumes in Portugal, landlords will also return to advertising their properties as Local Accommodation (AL).

"We are seeing an evolution in the rental market at the moment where some private properties are being placed on the market at lower prices. However, this is a reality that will not benefit us in the medium-long term," said the politician in interviews with Negócios and Antena 1. This comes after many tourist accommodation owners (known in Portugal as AL or Alojamento Local) decided to put their properties up for rent on the residential market in the desperate times of the pandemic. Gonçalves argues that these owners "are just waiting for tourism to get back on track to place these flats in the local accommodation market" and the proof of this is that they are, as a rule, generally only offering one-year lease contracts that do not provide any stability. 

Although the supply of properties available for rent in Portugal is increasing, when compared to the numbers registered in the pre-pandemic cycle, and with decreasing rental prices at the moment, Marina Gonçalves believes that this trend in the rental market is only circumstantial and that these lower prices being offered, "will not solve the structural problem".

The Housing Minister says that in the short term this situation is good for the market, as it currently "provides viable and balanced offers for all incomes." However, the minister also added that "when tourism comes back we're going to have these properties off the market again", something that will undoubtedly have an affect on rental prices in Portugal in 2021 and beyond. 

Referrer media
Ready to find the house of your dreams?

Ready to find the house of your dreams?

Find houses for sale and long term rentals on idealista