Portugal offers one of the lowest costs of living in Western Europe. Just about everything, from accommodation to groceries, is affordable. A couple can live comfortably in Portugal’s interior, or in small cities, from about $2,250 a month. A couple’s budget in Lisbon starts around $2,800 a month…though you can, of course, spend more. Singles should plan on a budget of about two-thirds that of a couple.
Accommodation—the single largest item on any expat’s budget—is reasonable, whether you rent or buy your property. Rents in small Portuguese cities and in the interior start as low as $500 a month for a one- to two-bedroom apartment. Rents in Lisbon, the capital, start at about $860 a month for neighbourhoods an easy half-hour walk from the central tourist neighbourhoods such as Baixa and Chiado. (Rents start near $1,300 a month for a comfortable one- or two-bedroom apartment in these neighbourhoods—still a bargain for a European capital.) Rents in the Alfama neighbourhood, Lisbon’s oldest, can run somewhat lower. But its hills and cobbled streets may not suit all expats.
If you’re looking to buy, you can find comfortable apartments for sale in the interior for well under $132,500. Even in Lisbon you can find small properties around the $199,000 price point in outlying neighbourhoods. Closing costs on property sales in Portugal tend to run around 10% of the purchase price.
Note that the average size of apartments in Portugal, as in the rest of Europe, is considerably smaller than many Australians are used to. A 51-square-metre apartment is considered perfectly adequate for a single person or a couple. A 92-square-metre apartment may have three or even four bedrooms and be considered suitable for a small family. Fortunately, Portugal’s generally mild climate means you are likely to spend lots of leisure time outside, on the beach, at outdoor cafés or strolling Portugal’s beautiful towns and villages.
Food costs are generally low. Many cities and towns in Portugal—including Lisbon—continue to have large, thriving traditional markets, as well as supermarkets. A couple’s grocery budget can run from about $265 a month, depending on how you choose to buy. Some items that are luxuries elsewhere, such as good wine and olive oil, are locally produced and therefore inexpensive. Decent bottles of local wine start at around $5.
Meals out don’t have to be expensive, either. Portugal’s prato do dia (the lunch special) generally runs €8 to €11 (about $12 to $16.50) per person and is a complete, sit-down meal. Dinner for two, including wine, can run from about $38.
Utilities, including electricity, heating, water and rubbish collection, for a mid-range apartment, can average around $106 a month. You may need to heat your apartment at times during Portugal’s relatively mild winter. And if you live in southern Portugal, you’ll likely want air conditioning during the hot summer months—which will increase your electricity bill.
But much of what is most enjoyable about Portugal—the friendly people, the leisurely lifestyle, mild weather, beautiful countryside and ample beaches—is free.