Residential rents in mainland Portugal increased 7.8% in the 4th quarter of 2019 when compared to the same quarter of 2018, as shown by the Residential Rents Index (IRR) of Confidencial Imobiliário.
This is the lowest year-on-year increase in the last two years, and it is necessary to go back to the 1st quarter of 2017 to find a lower variation (5.3%). In quarterly terms, however, rents accelerated again, with the variation of 2.2% obtained in the 4th quarter compared to the 0.2% observed in the previous quarter.
The homologous behavior confirms the tendency to slow down in the rent increases that started in the 2nd quarter of 2018, when a year-on-year variation of 13% was achieved. This loss of breath has been consistent, although not very abrupt, as it was only in the second half of 2019 that the variations were below 10%.
In Porto, rents also moderated annual growth, which was close to the national average, reaching 8.2% in the quarter under analysis. Similar to the national scenario, this was also the smallest increase in two years. The Porto market experienced a clear deceleration throughout the past year, with the year-on-year change obtained at the end of 2019 being 10.7 percentage points below the 18.9% growth registered a year earlier. In quarterly terms, on the contrary, there was an acceleration path throughout 2019, with the year ending with a chain variation of 3.1%.
In Lisbon, the change in pattern is much more signifiable, with rents rising just 1.4% year on year in the 4th quarter. Despite maintaining rents in growth, it is a relatively residual variation and that equals the pace recorded by this market in 2014, when the first steps were taken in the recovery after a period of accumulated losses of 18.4% (compared to 2010). Such a slowdown was even more significant if we consider that rents in Lisbon grew by 21.9% in early 2017 and that in that year and the following year they almost always increased above 17%. On the other hand, in the chain, Lisbon recovered, with the quarterly variation of 1.8% obtained in the 4th quarter compared to the -1.4% obtained in the previous quarter. This had been the IRR's first descent to Lisbon in 3 years.
About Confidencial Imobiliário
Ci – Confidencial Imobiliário is an independent market intelligence unit, oriented towards the satisfaction of information needs on the part of real estate market operators, in the context of investment decision making. It specializes in the production and dissemination of market analysis indicators, with exclusive indexes and databases on sales and rental of fires, with details to the area. The Ci Price Index stands out from its collection, which is the oldest series on real estate in Portugal, with more than 30 years. This index measures the appreciation of residential properties.