A changing market, thriving economy and favourable rules mean that Lisbon is bursting with opportunities. Here, we highlight a few.
Portugal was one of the big economic success stories of the last decade. After years of austerity, a new government created a thriving environment, reduced unemployment and transformed Portugal into a major travel destination. The impact on the property market in places such as Lisbon was electric. Everywhere you look there are new properties springing up. Forecasts are positive and demand is rising.
For this, and many other reasons, Lisbon is fast becoming one of the property hotspots of Europe. Here’s what the market has to offer and why now might be an ideal time to get involved.
Tourism is booming in Portugal. In 2022, the country was in the spotlight for winning over 30 World Travel Awards. A record of more than 1.8 million tourists visited Portugal in May 2023, according to data from the National Statistics Institute (INE). In the first five months of 2023, total foreign visitor numbers exceeded 6.4 million, up from 5.7 million in the same period of 2019.
As Portugal’s thriving capital, Lisbon is a particular highlight. Unsurprisingly, it was the most visited city in the country in 2022, having received a total of 5.4 million overnight visitors according to Statista.
The tourism sector is a key driver in the country’s economic success, accounting for almost 15% of the country’s total GDP. Only a year after the pandemic, the tourism and travel industry contributed over 25 million to the Portuguese economy – a jump of about 30 percent.
It has done this by embracing top tourism trends to turn itself into one of Europe’s stellar destinations. Lisbon has combined its rich heritage with trailblazing innovation based on a strategy known as Tourism 4.0. The government is putting its weight behind innovative start-ups which have helped to kickstart growth.
Cities such as Lisbon and the surrounding area have seen an enormous benefit. It combines the delights of a top city destination, a rich history, and a fantastic climate, and is in pole position to become one of the most up-and-coming destinations on the continent.
Living in Lisbon
In addition to business and employment opportunities—an excellent education system and unique quality of life draw more and more families to Lisbon every year. The capital was ranked among the ten cheapest and nicest cities to live in Europe, in a recent survey by Conde Nast Traveller.
With the country’s new Digital Nomad visa, it is now possible for any remote worker to stay in the country. To qualify, you must be earning more than four times the Portuguese minimum wage which amounts to around €2,800 per month. You can either stay for a year or apply for residency which will be reviewed after four years.
Our experts say
“Lisbon is often considered one of the most attractive cities to invest in thanks to its reputation as somewhere where its citizens enjoy a high quality of life and a market that is economically stable.
Surrounding areas such as Peniche really offer the best of both worlds, as it’s just an hour outside the bustling capital, but enjoys the benefit of beaches, charming historical architecture and a popular surf scene.
For those looking to buy, Lisbon is a diverse investment. Thanks to its popularity as a tourist destination, demand is year-round for Air B&B. Additionally, as Portugal’s humming commercial centre, it suits those looking for long-term tenants too.
And of course, the area makes for a perfect holiday or retirement investment”.
– Kevin Martin, Senior Property Consultant
How to get there
Portugal benefits from excellent highways, and is well connected across Europe. A journey between Porto and Lisbon takes approximately three hours, while a drive to the Algarve will take around 2.5 hours.
Lisbon is the hub of Portugal’s modestly-sized but efficient rail network. Lisbon is easy to reach by train from London, Paris, Madrid and other cities across Europe.
Lisbon Airport is located just 7km northeast of the city centre. Welcoming direct international flights from around the globe, it is the 20th largest airport in Europe in terms of passenger volume.
Lisbon is the busiest port on the European Atlantic coast. It has three terminals for cruise ships: Alcântara, Rocha de Conde d’Óbidos and Santa Apolónia. Most ships have shuttles from all these ports to Praça do Comércio in the city centre.
Enjoying a Mediterranean climate, Lisbon tends to have warm and sunny summers, with mild but rainy winters. The city enjoys an average of 2,800 of sunshine per year.
Spring is generally mild in Lisbon, with good weather becoming fairly stable from April onwards. Summers are warm and sunny, with average summer high temperatures of around 28.3°. A breeze blows from the Ocean tempering the warmer days, and making the climate extremely pleasant.
From mid-September to November is initially warm and sunny, then it gradually becomes milder, while waves of bad weather become more frequent. The coldest winter month is January, with an average high temperature of 14.8°C (58.6°F) and an average low temperature of 8.3°C (46.9°F).
Lisbon was ranked 16th on the PWC list of Most Attractive Cities for Real Estate Investments in 2022, and this has been reflected in an increased interest from international buyers. A Place in the Sun saw a growth of 39% in enquiries for Portugal real estate in the summer of 2022. It seems that despite a turbulent global economic climate, confidence in this long-standing holiday destination remains. And so it should.
A strong rebound in the tourism industry has supported GDP growth, which surpassed pre-pandemic levels in early 2022. Public investment is also helping to drive the country’s economy forward.
Plans for a new high-speed rail route in Portugal will increase connectivity between Porto and Lisbon by halving the existing journey time to 1 hour and 15 minutes. The project, set to boost tourism in the country, involves an investment of €4.9 billion to 2030 when the new railway is expected to be completed.
While the war in Ukraine, and rising food and energy prices, have led to a spike in inflation, experts predict that this should begin to fall back as 2023 progresses. Moreover, the low euro has created increased spending power for overseas investors. Able to get more for their money, buyers are looking to Europe for property bargains.
The overall picture is promising. Lisbon’s property market survived the pandemic intact, and new developments are springing up across the region. With more growth to come, Lisbon boasts the potential of a considerable return on investment, as pent-up tourism demand is released.
Lisbon saw the most significant increase in prime rents (13.9%) in the first half of 2023.
The municipality of Lisbon had the highest number of transactions in Portugal in the first quarter of 2023, with a total of 2,392 transactions. The average asking price of new, high-end properties also peaked in Q1 at 12 431€/sq. Low supply combined with high demand in the capital will continue to push real estate values up.