Out Of Control: Housing Effort Rate In Funchal

Both Renting And Buying A House Has Become Impossible For Many

In a recent study published by idealista.pt, Funchal is ranked most expensive city in Portugal in terms of increased housing effort rate for both buying and renting. The effort rate for renting has reached a whopping 89%, and 113% for buying which makes it the highest in Portugal (with Faro being second). Due to the low average income in Madeira, Funchal’s effort rate is even higher than in Lisbon.

What Is A Healthy Effort Rate

When we talk of a high, it means that a significant portion of residents' income is allocated to meet housing expenses. A healthy effort rate should be around 30%, it can be slightly higher if you have a medium to high income.

However, in general terms, it can be said that the effort rate should not exceed 33%, that is, about one third of the household's total income.

Supercasa

Buying Up 34%, Renting Up 15% - Within 12 Months

Within the last 12 months, after considering changes in the average available income, the average price of renting a place in Funchal has increased 15%. During that same period of time, buying even went up further and reached 34%.

Funchal is the city that requires the greatest effort on the part of families to rent a house, requiring 89% of their income to be allocated. This is followed by Faro (87%), Lisbon (87%), (…).

Diário de Notícias Madeira

Statistics On The Housing Effort Rate

See a comparion in the effort rate changes with Portugals capital Lisbon.

Source: Idealista.pt