Lisbon

Portugal

A changing market, thriving economy and favourable rules mean 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

Tourism is booming in Portugal. 12.8million tourists visited in 2018, setting a record for the sixth successive year. Hotel revenues rose by 15.1% with yearly revenues of €2.9bn. It is now Portugal’s biggest sector accounting for 8.2% of GDP in 2018.

Within that surge Lisbon is a particular highlight. Visitor numbers rose by 27% in 2018 alone, revenues were up by 25 in the three years leading up to 2018 and the property market has boomed by 16%, according to the Observatório Turismo de Lisboa.

The pandemic has stymied tourism to an extent, just as it has everywhere else, but going into 2020 the market was in a positive frame of mind and it is poised to rebound strongly in 2021.

It has done this by embracing top tourism trends to turn itself into one of Europe’s stellar destinations. It has combined its rich heritage with trail blazing 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 enormous benefit. It combines the delights of a top city destination, a rich history, fantastic climate, and is in pole position to become one of the most up and coming destinations on the continent.

A prime example of this is the small Peniche peninsula. Stretching along the beautiful coast, it has become known as the ‘city of surf’. It is only an hour’s drive north of Lisbon airport offering beautiful beaches and cliffs riddles with secretive caves.

The peninsular has become a Mecca for surfers around the world because it almost guarantees outstanding conditions. If there are no waves on one side of the peninsular, there will almost certainly be some on the other. 

The jewel in its crown is the beach of Supertubos which has developed a reputation for having one of the best surf breaks in the world. Every October, it hosts the Rip Curl Pro tournament bringing together the world’s elite surfers.

The region is also known for its rich offering of fresh fish and seafood which comes in straight from the port and is offered up on the restaurants across the old City.

Small wonder this place was named as one of Portugal’s seven wonders in a national competition.

Our experts say

“Lisbon is often considered one of the most attractive cities to invest in thanks to it’s reputation as somewhere where it’s 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, it’s a diverse investment. Thanks to it’s popularity with surfers, demand is year round for Air B&B, but additionally the central and well connected location means that for those who prefer a long term tenant, the local demand is there too. And of course, the area makes for a perfect holiday or retirement investment too”.

– Kevin Martin, Senior Property Consultant

How to get there

By road

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.

By train

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.

By air

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.

By boat

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.

Weather

Enjoying a Mediterranean climate, Lisbon tends to have warm and sunny summers, with mild but rainy winters. Lisbon enjoys an average 2800 of sunshine per year.

Spring/Summer

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.

Autumn/Winter

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).

Why invest

Tourism combines with an economy which, after some years of struggle has been booming. Portugal struggled under austerity after the financial crisis. However, from 2014, things picked up.

The election of Antonio Costa saw Portugal transformed. The socialist government ‘turned the page’ on austerity. Initially this put him at odds with the European Commission who warned that Portugal would be forced to seek a new bail out which would come with extremely strict and unfavourable terms.

By 2017 Portugal was registering a growth rate of 2.7% as the government carefully managed a program of regeneration with fiscal responsibility. By 2020 the government was expecting to register the first surplus in the country’s history.

The pandemic caused a contraction in the economy, but with light at the end of the tunnel analysts predict the economy to bounce back strongly with growth of 4.1%.

Thanks to the solid work before the pandemic, Portugal’s economy headed into the crisis in a strong position and can expect good things as it comes out the other side.

This in turn has created to a property market full of potential.

A thriving economy and booming tourism market translated into the property market. Mainland prices shot up by 15% over 2019. Government initiatives brought growth back to the market, reduced unemployment and stimulated demand.

All this means there are positive signs across the board, but it is in tourism and new developments where the real interest can be found. These are springing up across the region capitalising on affordable prices in up-and-coming locations with room to move.

The Marques de Pombal development in Peniche offers a prime example. Located in the heart of Peniche, a few minutes’ walk away from the port an old building is being redeveloped into a prime residential property. The new building will combine the heritage of the area with the very latest mod cons.

In total there will be 12 one bed and two bed apartments with a roof terrace and communal swimming pool. It comes with a tourism license allowing for short term rentals and private use. It provides an ideal location for one of the most attractive surf spots in the world and one of the fastest growing tourism destinations in Europe.

With more growth to come it boasts the potential of a considerable return on investment, as pent-up tourism demand is released after the pandemic. Developments like this offer an illustration of where the local market is going.

The overall picture, therefore, is promising. Lisbon’s property market survived the pandemic intact. House prices rose by more than 5% despite the restrictions. As the country emerges from lockdown demand is growing for wide open spaces, which are also conveniently located for major metropolitan areas.

This, coupled with an expected surge in tourism, means regions such as Peniche, Lisbon and the surrounding area are poised for growth.