LISBON, August 11 — Rental demand in Portugal is showing signs of a slowdown, with new data revealing a sharp drop in tenant interest across major urban centers. While rental prices remain high, the average number of inquiries per listing has declined significantly, suggesting a shift in market dynamics.

According to recent figures, cities like Porto and Lisbon—long considered hotspots for renters—have seen demand fall by over 60% compared to the same period last year. In contrast, smaller cities such as Portalegre and Faro are experiencing heightened interest, with some listings attracting over 50 inquiries each.

Experts attribute the trend to a broader dispersion of available rental properties, as more listings emerge outside traditional urban hubs. “The slowdown doesn’t necessarily mean people aren’t looking—it reflects a wider spread of options,” said a spokesperson from a leading real estate platform.

Despite the cooling demand, affordability remains a challenge. Lisbon continues to top the charts with average monthly rents exceeding €1,700, pricing out many locals. Suburban areas like Barreiro and Amadora offer more accessible options, averaging around €1,200 per month, and have become increasingly popular among renters.

The shift in rental behavior may signal a rebalancing of Portugal’s housing market, as supply begins to catch up with years of pent-up demand. However, analysts caution that high prices and limited long-term rental stock still pose barriers for many residents.