Renting a home in Madeira is becoming increasingly expensive and difficult. The region is one of the most costly in Portugal, with high rents and a steadily shrinking supply of housing, especially in Funchal.
Rental prices in Madeira per square meter
According to data from the Madeira Regional Directorate of Statistics, in the first quarter of 2025 the median rental values were:
- Portugal: €8.22/m²
- Autonomous Region of Madeira: €10.44/m²
- Funchal: €11.34/m²
Among the nine NUTS II regions, Madeira ranks as the second most expensive in the country, only behind Greater Lisbon (€13.16/m²).
These figures clearly show that living in Madeira, particularly in Funchal, requires a high housing budget.
How much does it cost to rent a home in Madeira?
In practice, monthly rental prices vary widely depending on property type and location:
- T0 (studio): €750–€1,000
- T1 and T2: €1,000–€2,500
- Larger or luxury homes: above €3,000
These values mean that many families face serious difficulties finding affordable housing.
Fewer rental properties available
Another worrying factor is the decline in the number of rental contracts, indicating that fewer properties are available on the market.
With reduced supply and high demand, the result is predictable: prices continue to rise and competition for housing intensifies.
Impact of short-term rentals in Madeira
The growth of local accommodation (short-term rentals) has played an important role in this housing crisis. Many property owners choose to place their homes in the tourist market, where they can achieve higher returns, reducing the supply of long-term rentals.
To try to balance the situation, some measures have been introduced in certain municipalities.
Restrictions on short-term rentals in Funchal and Machico
In the municipalities of Funchal and Machico, restrictions have been imposed on the issuance of new short-term rental registrations in specific areas.
These limitations aim to:
- Slow the growth of short-term rentals
- Free up housing for long-term rental
- Control rising prices
However, the impact of these measures remains limited and does not yet solve the housing shortage.
Why is living in Madeira so expensive?
Several factors explain the high prices:
- Strong demand from residents and foreigners
- Growth in tourism
- Limited housing supply
- Conversion of properties into short-term rentals
- Young people choosing to buy instead of rent
Faced with high rents, many families—especially young couples—are opting to buy homes instead.
With current 100% financing schemes for young buyers, purchasing a home has in some cases become more accessible than renting. In fact, mortgage payments can sometimes be lower than monthly rent, making buying a more financially attractive option in the medium term.
Overcrowded housing
According to the Madeira Regional Directorate of Statistics, in 2025 the housing overcrowding rate stood at 23.5%, reflecting an increase of 4.1 percentage points compared to the previous year.
In comparison, the national average was 12.7%, also up by 1.5 percentage points from 2024. These figures show that housing pressure in the region is significantly higher than the national average.
In Madeira, many families are unable to rent larger homes due to high prices, forcing them to live in smaller spaces or share housing with relatives or others. In addition, many household incomes have not kept up with the rising cost of living, resulting in tighter living conditions.
Conclusion: is it worth renting in Madeira?
Renting a home in Madeira in 2026 is a challenge. With rents above the national average, low supply, and high demand, finding housing requires both time and a substantial budget.
Although measures such as restrictions on short-term rentals may help in the future, the current reality remains defined by high prices and a shortage of available homes.
