Portugal's Gross Rental Yield Moderates to 6.9% in Third Quarter of 2025
The gross rental yield for residential property investments in Portugal stood at 6.9% in the third quarter of 2025, according to new data published by the real estate portal Idealista. This figure indicates a slight compression in profitability for landlords and investors across the country when compared to recent years. The report's findings are based on an analysis of asking prices for both property sales and rentals listed on its platform during the period.
The methodology used by Idealista to determine gross profitability involves dividing the asking sale price of a property by the requested rental price to calculate the annual return before expenses. The resulting national average of 6.9% for Q3 2025 is 0.3 percentage points lower than the 7.2% yield recorded in the same quarter of 2024. The decline is more pronounced when compared to the third quarter of 2023, which registered a yield of 7.4%, representing a year-on-year decrease of 0.5 percentage points.
Despite the recent downward trend, the report notes that current rental returns remain above those seen in the years immediately preceding the market's recent acceleration. The Q3 2025 yield of 6.9% is 0.4 percentage points higher than the 6.5% profitability recorded in the third quarter of 2020, suggesting that the market has sustained a higher baseline for returns.
The statistical analysis reveals significant regional variations in investment attractiveness. The district of Castelo Branco was identified as the most profitable market for residential rental investment, offering a gross yield of 9.0%. Following Castelo Branco, the district of Bragança provided the second-highest return at 8.0%. Other districts with yields above the national average included Santarém (7.1%) and Coimbra (6.7%).
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Conversely, the markets with the highest property values offered the lowest rental yields. The Lisbon district, which encompasses the nation's capital and most expensive real estate, recorded a gross yield of just 4.6%. This positions Lisbon as the least profitable district for buy-to-let investments based on this metric. The autonomous region of Madeira, specifically Funchal, also showed lower returns, with a yield of 4.8%. Other major districts such as Porto (5.7%), Braga (5.6%), and Setúbal (5.3%) posted yields below the national average but remained above the figures for Lisbon.
The study also extended its analysis to commercial real estate segments. The data showed that investing in office spaces provided a gross yield of 8.0% in the third quarter. Retail properties, or shops, offered a slightly higher return of 8.1%, making it the most profitable segment analyzed. The market for garages, often considered a niche but stable asset class, presented a yield of 5.2%.
The report from Idealista provides a quantitative snapshot of the current state of the Portuguese rental market, reflecting the interplay between rising property prices and rental values. The data indicates a market that is maturing, with yields beginning to normalize after a period of rapid growth. The divergence between high-yield interior regions and low-yield primary cities remains a defining feature of the national real estate landscape.
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