Where in Portugal should we live?
Portugal is small, but Lisbon, Porto, the Algarve and Madeira feel very different. Your choice decides your rent, your winter weather, your tax rate (lower in Madeira and the Azores) and how easy it is to fly home.
In 30 seconds
- Lisbon has the most jobs and by far the highest rents; Braga and Coimbra have the lowest of the six places in our calculators
- The Algarve and Madeira are the sunniest, mildest choices. The UK is Faro airport’s biggest market, at 46% of its traffic
- Rents are rising fastest in the Algarve (15.2% in a year), and Lisbon and Porto now limit new holiday lets in busy areas
The six places at a glance
Populations are for the municipality (concelho) in 2023, from INE estimates; the wider city areas are much bigger. Temperatures are average daily highs for 1991–2020 (Braga 1981–2010). Rents are the typical asking rent for a 2-bedroom flat used in our calculators (September 2026, market estimate).
| Place | People | January high | July high | Rain a year | 2-bed rent a month | Nearest airport (passengers 2025) |
|---|---|---|---|---|---|---|
| Lisbon | 567,131 | 15.1°C | 28.2°C | 794mm | €2,010 | Lisbon (36.1 million) |
| Porto | 248,769 | 13.9°C | 25.1°C | 993mm | €1,520 | Porto (16.9 million) |
| Faro (Algarve) | 69,468 | 16.3°C | 29.4°C | 455mm | €1,180 | Faro (10.4 million) |
| Funchal (Madeira) | 107,562 | 19.8°C | 25.6°C | 818mm | €1,340 | Madeira airports (5.6 million) |
| Coimbra | 144,822 | 15.0°C | 27.6°C | 866mm | €1,020 | Porto or Lisbon |
| Braga | 201,583 | 13.7°C | 27.8°C | 1,449mm | €860 | Porto |
The north is greener and much wetter in winter; the Algarve is dry and hot in summer; Funchal has the mildest winters and the coolest summers of the six. More in How do we cope with, and enjoy, a Portuguese summer? and What are the cooler months like, and how do we make the most of them?
What each place is like
| Place | In short |
|---|---|
| Lisbon | The capital and the biggest job market, with the highest rents (€25.10 per m², September 2026). Lisbon district had 605,895 foreign residents at the end of 2025, more than any other. The British Embassy is here |
| Cascais, Sintra and Setúbal | Commuter towns around Lisbon. Cascais (219,636 people) is on the coast west of the city, Sintra (395,528) inland to the north-west, and Setúbal (123,548) across the Tagus to the south, where city rents were €13.70 per m² |
| Porto | Portugal’s second city, on the Douro. Rents are about a quarter lower than Lisbon’s, and rents in the North region fell 5.3% in the year to September 2026 |
| The Algarve (Faro) | The south coast, with the driest, sunniest climate. Faro city is cheaper than coastal towns such as Lagos, Albufeira or Loulé: the region’s median was €20.80 per m². The UK is Faro airport’s biggest market, and there is a British Vice Consulate in Portimão |
| Madeira (Funchal) | An Atlantic island with mild weather all year. Income tax rates are 30% lower than on the mainland, and the minimum wage is higher (€980). Its airports handled 5.6 million passengers in 2025, up 12% |
| Coimbra | A university city in the centre, with low rents (€12.80 per m²) |
| Braga | A city in the north with the lowest rents in our table (€10.70 per m²) and the wettest climate |
The Silver Coast and the Alentejo
The Silver Coast (Costa de Prata) runs north of Lisbon through towns such as Caldas da Rainha (54,145 people), Óbidos and Nazaré, with Leiria (€9.50 per m²) inland. The Alentejo lies between Lisbon and the Algarve; its regional median rent was €11.70 per m², though it rose 14.1% in a year, and Évora (53,937 people) is the main city. Both are much cheaper to rent in than Lisbon. Check public transport before you choose a small town, or budget for a car.
Rent pressure
Across Portugal, asking rents rose 6.1% in the year to September 2026. The biggest rises were in the Algarve (15.2%), the Alentejo (14.1%), the Azores (12.2%) and the Lisbon metropolitan area (9.3%). Madeira rose 7.8%. Supply is tight in all the popular areas, so budget for higher rents than the averages in the best-located flats.
Holiday lets (alojamento local)
Short-term holiday lets need a registration, and since Decree-Law 76/2024 (in force from 1 November 2024) each town hall can set its own limits:
- Councils can create containment areas (áreas de contenção) where new registrations are limited, and can suspend new registrations for up to a year while they write their rules. Decree-Law 151/2026 gives councils until 31 December 2026 to approve their regulations
- Lisbon: a regulation in force since December 2025 bans new registrations where holiday lets reach 10% of permanent homes in an area, and needs council approval between 5% and 10%. Almost 7,000 inactive registrations were cancelled
- Porto has had containment areas since 2023 and in May 2026 announced it would cancel 1,413 registrations
- If you plan to buy and rent out a property, check the town hall’s rules first: a holiday let may not be allowed. See Can we buy a home in Portugal?
A shortlist by household
| If you are… | Places to look at first | Why |
|---|---|---|
| Single, career first | Lisbon, Porto | The biggest job markets and social scenes |
| A couple | Porto, Lisbon’s coast, Coimbra | City life with a range of rents |
| A family | The Lisbon and Porto suburbs, Cascais, Braga, the Algarve | More space for the rent and a choice of international schools. See How do schools work in Portugal? |
| Retiring | The Algarve, Madeira, the Silver Coast | Mild winters and many UK flights from Faro; lower tax rates in Madeira. Check your visa route first |
| Working remotely | Porto, Madeira, Coimbra, Braga | Good value and decent links. Madeira has lower income tax rates |
How to decide
- Start with where the jobs in your field are
- Compare rents for the home you need, not the city average
- Look at winter as well as summer: the north gets far more rain
- Check flights to your nearest UK airport in winter as well as summer
- If you need a car, see what running one costs
- Visit in summer and in winter before you sign a long lease
What to do next
- Shortlist two or three places
- Compare rents with the cost of living calculator
- Check winter flights from your nearest UK airport
Keep going
- Wikipedia: List of municipalities of Portugal (population 2023, INE estimates)
- Wikipedia: Lisbon, climate data (IPMA, Instituto Geofísico, 1991–2020)
- Wikipedia: Porto, climate data (Serra do Pilar, 1991–2020)
- Wikipedia: Faro, climate data (Faro airport, 1991–2020)
- Wikipedia: Funchal, climate data (Funchal Observatory, 1991–2020)
- Wikipedia: Coimbra, climate data (1991–2020)
- Wikipedia: Braga, climate data (1981–2010)
- DNotícias: idealista rental price report, September 2026 (published 2 Oct 2026, market data)
- Essential Business: Portugal’s airports saw 72.5 million passengers in 2025 (Jan 2026)
- Postal do Algarve: Faro passes 10 million passengers for the first time in 2025
- Postal do Algarve: Faro is the fourth district for foreign residents (AIMA Migration and Asylum Report 2025)
- GOV.UK: British Embassy Lisbon (and Vice Consulate in Portimão)
- Governo Regional da Madeira: Regional Legislative Decree 8/2025/M (Madeira IRS rates 2026)
- Garrigues: Madeira minimum wage rises to €980 in 2026 (Regional Legislative Decree 1/2026/M, Feb 2026)
- PLMJ: Municipal regulation of short-term lets (alojamento local), Decree-Law 151/2026 (Aug 2026)
- GuestReady: Lisbon short-let containment areas, what changed in 2026 (secondary)
- Renascença: Porto to cancel 1,413 short-let registrations (22 May 2026)