Savills News

Growth rate of luxury property rents slows in Lisbon

According to Savills latest “Prime Residential World Cities index” study, rents for luxury residential properties continue to rise around the world. 25 of the 30 cities monitored in the study showed positive rental growth over the course of 2024, with rents increasing by an average of 4.3 % in all cities

Rents for luxury properties in Lisbon rose by 10.5 % in 2024, but after a 30 % increase in one year in 2023, the value of new leases has naturally slowed down. The luxury property rental market in Lisbon is going through a period of slower growth in rental values, with growth of 2.8% in the second half of 2024, showing signs of entering a period of stability compared to the pronounced increases seen in the past.

Other European cities also saw strong rental growth in 2024, with Barcelona, Amsterdam, Madrid and Athens reporting increases of more than 5 % over the year. In Spain, supply remains scarce in both Barcelona and Madrid, underpinning the upward trend in rental prices. Lower levels of high-quality rental stock are also contributing to the increases in high-end rents in Amsterdam and Athens, with legislative changes in Amsterdam, such as the Affordable Housing Act, expected to positively leverage demand for luxury residential housing as private rental supply decreases.

Dubai, which occupies first place in the ranking, continues to grow stronger in its luxury rental market. With the increase in new residents from all continents, luxury rents increased by 23.5 % in 2024, surpassing the market peak of 2016.

On average across all the world's cities, prime gross yields increased by five basis points in 2024, to 3.15 %, as global rental markets recorded stronger growth than sales markets.

Catarina Alves, Sales Manager at Savills, emphasises: "Lisbon continues to see an increase in rental values for luxury properties, although now at a slower pace after the peak recorded in 2023. This trend is expected to continue in the prime market in 2025, as the supply of premium properties remains stable and demand should continue to be active, both from national and international clients. Lisbon continues to be a highly sought-after city to live in due to the quality of life it offers, its good infrastructure, its range of health and education services, among others."

Kelcie Sellers, Associate director, Savills World Research, comments: "Although interest rates remain high, it is likely that many potential buyers will continue to turn to prime rental markets. By 2025, high-end rental prices are expected to show a slight increase in the 30 cities covered by the World Cities index, but this growth is likely to remain below the historical average. Dubai is forecast to lead the growth rate in rents in 2025, with an expected increase of more than 10 %. The market has seen an increase in demand from national and international tenants looking to get a piece of the Dubai lifestyle."

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