Only 26% of Portuguese reside in rented housing, according to 2019 data from Eurostat, highlighting the strongly entrenched ownership culture in Portugal. However, analysis by international real estate consultancy Savills suggests that the portion of the Portuguese population in the rental market may be set to increase. 

This is due to the negative effects of the COVID-19 pandemic on income and greater difficulty in accessing home loans. 

Savills’ report Built-to-Rent: More than a trend, states that the supply in the rental market does not match the strong and growing demand and prices are too high for the quality of the product presented. 

In the European context, Portuguese families are the ones that contract the most debt for the acquisition of a home, estimating that, on average, they allocate around 40% of their income every month for the payment of loan instalments. 

The data also shows that there is an imbalance between the evolution of Portuguese peoples' income and the price of buying a house, with the market falling short of the financial capacity of many. 

Thus, renting is a necessity, rather than a trend or a choice, for younger demographic segments and for several families, including single-parent families, who have difficulties in accessing housing loans. Data shows that between 2015 and 2020, housing prices have risen 31% more than Portuguese incomes. 

One solution to fill the shortage of supply in the rental market, and to meet an increasingly intense demand, is the Build-to-Rent model (BTR), in which multifamily projects are developed, a segment that has seen significant growth in Europe over the last few years. 

Factors enhancing the attractiveness of the BTR model are its resilience and imperviousness to economic cycles, its stability and the possibility of establishing long-term returns and diversification of investment portfolios. 

In Portugal, BTR projects have emerged as a response to the shortage of supply in the rental housing market, and to the growing demand, which should continue to be evident in the near future. 

In order to restore some vitality to the rental market, the Portuguese government has activated the controlled cost housing and affordable rent programs, with the main objective of adjusting housing prices to the financial capacities of the Portuguese.

For Lisbon, there is an estimated pipeline of 10,000 dwellings, as a result of BTR projects, either entirely developed by private initiative or within the scope of public programmes to support affordable housing. 

In large urban centers, especially in Lisbon and Porto, the increase in house purchase prices is intensified by the strong growth in tourism and by foreign investment, as a result of the Residence Permit for Investment Activity program, the so-called "gold visas". This limits the possibility for young people to settle in urban places. 

"More than a trend, investing in the development of a quality rental offer, accessible to various salary ranges, becomes essential in the context of growing demand and as an essential part of solving a social problem," explains Alexandra Gomes, Head of Research at Savills Portugal.