Funchal Families Spend 100% of Income on Rent in Third Quarter 2025
Housing costs in Funchal continue to take a large share of family income. According to idealista, based on the city’s average household income, households in Funchal would need to spend 100% of their income on rent in the third quarter of 2025. This is the highest rental effort rate among all Portuguese cities and it increased 11% from February 2024. Other cities with high rental pressure included Faro at 93% and Lisbon at 83%.
Funchal Households Also Face High Costs When Buying Homes
Families in Funchal spend 99% of their income on mortgage payments when purchasing a home. Lisbon households spend slightly more at 111%, while Faro households allocate 93%. In contrast, many interior cities face much lower financial pressure, including Guarda and Castelo Branco at 18%, Portalegre at 20%, and Bragança at 21%.
Regional Differences Show Madeira and Coastal Cities Have Higher Housing Costs
Funchal’s extreme rental and purchase rates highlight regional differences in Portugal’s housing market. Coastal and island cities like Madeira face greater financial pressure on households compared with northern and interior regions, where rental and purchase effort rates are far lower.
High Costs in Funchal Reflect National Housing Challenges
The study analyzed data from the second to the third quarter of 2025. These figures illustrate that housing remains a major challenge for Portuguese families, particularly in Madeira, Faro, and Lisbon, where both rent and mortgage payments take up a very large portion of household income.
Source: Idealista
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