Recent data shows that international house hunters remain steadfast in their love of Portugal property. Overseas buyers represented 27% of the demand for homes in December 2022, and the last months of 2019. Rental demand, though, grew from 24% to 32% during the same period.
Brazilian, North American, and French markets are the most active when looking at houses for sale in 20 of Portugal’s district capitals.
In Faro—the capital of southern Portugal’s Algarve region—1 in 3 people looking to purchase a home are foreign buyers. Germans, Britons, and North Americans are the most active in the market.
International home hunters make up 21% of the demand in Lisbon as of December last year, reflecting an increase of 0.9% compared to 2019.
One in five people looking to buy a house in Porto—Portugal’s “second city”—are from abroad, up a more modest 0.6% on 2019.
Varying from Faro, the main markets in Lisbon and Porto are Brazil, the USA and Spain.
When buyers from outside of the EU go on to purchase a property, they spend a shocking 95% more than residents (Bank of Portugal).
In the regions where foreign buyers are most active, house prices are experiencing a faster growth rate. According to idealista, real estate values increased by 19.8% in the Algarve, 14.5% in Lisbon, 11% in Porto—and 10.8% in the rest of the country.
Foreign nationals are also looking to rent
While Portuguese nationals continue to dominate the rental market, foreign demand for rental homes increased from 24% in 2019 to 32% in 2022.
International demand for rental homes grew in 19 of the 20 Portuguese cities analysed by Idealista. The foreign nationals most active in the rental market were Brazilians, followed by Americans and Spaniards.
One in three prospective tenants in Porto are of foreign origin. Demand grew by 11.6%, behind only Ponta Delgada (+19.1%) and Funchal (+19%).
As Portugal’s multicultural capital, it comes as no surprise that 29% of those looking to rent property in Lisbon are from overseas. International demand for rental homes in the capital grew by 10.3% compared to the end of 2019.
In Faro, a whopping 38% of the demand for rental homes comes from foreigners. The city registered a more modest increase in demand (3.2%) than growing cities like Lisbon and Porto, but international interest has always been strong on Portugal’s sunny southern coast. With its expansive coastlines and laid-back lifestyle, the Algarve is the ideal destination for retirees, expats, and holidayers alike.
Overall, Portugal’s housing market attracts attention from all corners of the globe. People from abroad are flooding in to experience the country’s beautiful landscapes, vibrant cities, and unique culture. This is not only sustaining a strong international interest in Portuguese property but also increasing foreign demand for rental homes.
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