Housing Costs Burden Most Tenants

Housing expenses have a significant impact on family budgets, particularly in the Lisbon Metropolitan Area (LMA), where over 70% of tenants are financially burdened. The rising rent prices and poor living conditions in many homes add to the challenges faced by the population, making housing one of the main factors of social inequality.

In the LMA, most tenants struggle to cover housing expenses. In many cases, rent and related costs exceed 35% of the household income, a threshold that defines financial strain. Around 29% of tenants are in a moderate situation, spending between 35% and 50% of their income on housing, while 45% face a high burden, with expenses exceeding half of their monthly income.

The widespread increase in rent prices exacerbates this reality. In the third quarter of 2024, the median rent price in Greater Lisbon reached €13.53 per square metre, while in the Setúbal Peninsula it was €10.18 per square metre, both among the highest in the country. Without effective regulatory mechanisms, many tenants are forced to allocate a significant portion of their budget to keep their homes.

The rental market in the LMA is divided into three distinct segments. The liberalised segment includes recent contracts, characterised by high rents and great contractual instability. The protected segment consists of older contracts, established before 1990, with regulated rents but often in deteriorating buildings. Finally, the growing informal market includes rented properties without formal contracts, where housing and employment insecurity intersect.

Inequalities within these segments are also evident. In the liberalised market, the most vulnerable tenants, such as the unemployed and precarious workers, are particularly exposed to unsustainable financial burdens. Women and foreign populations also experience higher levels of financial strain.

The quality of housing is another concern in the LMA, with many tenants living in inadequate conditions. Only 13% of respondents report living in properties without structural issues. Among the most common problems are humidity, leaks, lack of thermal insulation, and building deterioration, all of which compromise comfort and safety.

This situation is particularly worrying in the protected and informal segments. In older contracts, the lack of investment in building maintenance leads to the gradual degradation of living conditions. In the informal market, the absence of legal contracts prevents tenants from demanding improvements, perpetuating situations of inadequate housing.

The burden of housing costs and the lack of affordable alternatives make it urgent to adopt measures to ensure decent living conditions for tenants. Regulating the rental market, investing in housing stock rehabilitation, and increasing the supply of affordable housing are essential steps to combat the housing crisis and reduce inequalities associated with access to housing in Portugal.

Source: SUPERCASA