Portugal's Rental Yields Show Divergence Between Lisbon and Regional Cities
The gross rental yield for residential property in Portugal was 6.9% in the summer of 2025, according to a study by the real estate portal Idealista. This figure represents a decrease of 0.3 percentage points from the same period in 2024 and 0.5 points from the third quarter of 2023. The data suggests that while overall profitability has slightly decreased, the risk associated with the investment is lower than in the past two years. The current yield is still 0.4 percentage points above the figure from 2020.
The analysis is based on gross rental yield, which does not account for taxes and other expenses. The report notes a significant gap between the growth in sales prices and rental prices, which rose by 7.6% and 4.1% respectively in the year to September 2025. This divergence is a key factor influencing yield calculations. For investors, understanding the financial implications requires careful review of financial concerns in the buying process.
The study provides a geographic breakdown of rental yields by district capital, revealing a clear risk-return spectrum. Castelo Branco recorded the highest gross yield at 9%, making it the most profitable city for a buy-to-let investment on paper, though the report notes this market carries higher risks, such as potential difficulties in securing tenants. Following Castelo Branco are Bragança (8%), Santarém (7.1%), and Coimbra (6.7%).
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At the other end of the spectrum are Portugal's main property markets. Lisbon registered the lowest yield at 4.6%, with Funchal just ahead at 4.8%. Porto offered a yield of 5.7%. The lower yields in these cities are correlated with lower investment risk, a higher probability of securing tenants, and stronger potential for long-term capital appreciation. These are crucial real estate market insights for any potential buyer.
The analysis also covered non-residential property types. Nationally, offices presented a gross yield of 8%, retail properties 8.1%, and garages 5.2%. This data provides a comparative baseline for investors evaluating different asset classes within the Portuguese real estate sector. A diversified strategy might involve looking at various investment property specialists.
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