Housing Dilemma in Portugal: 82% of Salary Goes to Rent

The topic that everyone in Portugal talks about most on the street, in cafes and in markets does not change: The incredible situation in housing prices and rents. When Idealista's second quarter data for 2026 came to the table, the seriousness of the situation was once again documented. Families across the country spend a full 82% of their average income just to pay rent. The situation is no different for those who want to buy a house; 76% of the average household income is tied to loans and housing installments.

The basic rule that experts recommend for a healthy budget is clear: Housing costs should not exceed 33% of household income. However, the reality on the streets of Portugal today is not even close to this rule.

The Peak in Rents is in Faro and Funchal

When we look at the list of 20 cities analyzed, the places where the situation is felt most severely are the south and the islands, which are the heart of tourism.

Faro: Rent burden ranked first, reaching 101% of household income. So a single average salary is no longer even enough for rent.

Funchal (Madeira): Coming right behind with 99%.

Lisbon: Maintaining the cost of living in the capital, remaining at 80%.

Porto and Others: Porto 69%, Setúbal 66%, Ponta Delgada 57%, Aveiro 54%, Évora, Braga and Santarém 51%.

The only county seat in the country to come close to the recommended 33% limit on rentals was Portalegre in the Alentejo region.

Buying is not a solution either

The calculations are extremely challenging for those who say, "Let's get rid of rent and buy my own house." On the purchasing side, Funchal is the city that puts the most strain on the family budget, with a rate of 115%. Lisbon follows with 99% and Faro with 84%. A family who wants to buy a house in Porto must sacrifice 82% of their income.

In only 6 cities in the central and northern regions, purchasing costs remain below the reasonable 33% limit:

Guarda: 20%

Portalegre: 23%

Castelo Branco: 23%

Bragança: 27%

Beige: 30%

Vila Real: 31%

At the end of the day, the picture is very clear; Housing on the coastline and in big cities now directly determines not only the budget but also the entire balance of daily life.

Source: Sidsel Senius (Idealista / Publituris, 19 August 2026)

Photo: Pexels / Ketut Subiyanto