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Sep 21, 2016

Rental yields on Lisbon apartments good, ranging from 5.4% to 6.2%

Last Updated: Sep. 21, 2016
ALGARVE - Apartments COST (€) YIELD (p.a.) PRICE/SQ.M. (€)
70 sq. m. 133,140 421 3.79% 1,902 6.01
120 sq. m. 214,320 619 3.47% 1,786 5.16
ALGARVE - Villas
150 sq. m. 361,950 918 3.04% 2,413 6.12
300 sq. m. 996,800 2,356 2.84% 2,492 5.89
LISBOA - Apartments
50 sq. m. 126,450 666 6.32% 2,529 13.32
85 sq. m. 196,095 1,006 6.16% 2,307 11.84
120 sq. m. 305,160 1,434 5.64% 2,543 11.95
250 sq. m. 840,000 3,153 4.50% 3,360 12.61
LISBOA - Villas
200 sq. m. 410,600 2,070 6.05% 2,053 10.35
450 sq. m. 922,050 4,185 5.45% 2,049 9.30
Districts researched:
The Algarve region includes the municipalities of Albufeira, Faro, Lagoa,
and the towns of Almancil, Vilamoura and Vila Real de Santo Antonio.
Lisboa region include the districts of Lisboa, Cascais and Oeiras.
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

Lisbon´s property market is now reasonably priced.  Comparatively speaking, Lisbon housing prices are among Europe´s lowest:

  • an 85 square metres (sq. m.) Lisbon apartment in an elite area may cost around EUR 200,000 to buy.
  • a 120 sq. m. Lisbon apartment may cost around EUR 300,000 to buy.
  • a 250 sq m. Lisbon apartment may cost around EUR 840,000

How much will you earn?  Apartment yields in Lisbon range from 5.4% to 6.2%, with smaller apartments earning proportionately more. These are good yields and the purchase price is attractive for a European capital city, though Lisbon is hardly at the centre of things. Villas in Lisbon have similar gross rental yields.

In Algarve, a 120 sq. m. apartment costs on average EUR 1,800 per sq. m., or EUR 215,000. Algarve apartments return rental yields which range from 3.5% to 3.8%.

Our rental yields figures assume long-term lets; short-term rentals may earn higher returns.

Villas in the Algarve generally earn lower returns.

Conclusion: after many years on the back-burner, Lisbon is looking good.  Tourist interest in the centre of Lisbon is enormous, so the option of letting via Airbnb is there for much of the year.  Lisbon´s rental yields are comparatively among the highest in Europe, and Lisbon´s price to rent ratios are among Europe´s lowest.

Round trip transaction costs can be high in Portugal. See our property transaction costs analysis for Portugal and Property transaction costs in Portugal, compared to the rest of Europe.


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