Portugal has long topped the lists of best places to live, with cost of living and lifestyle being major factors, but over the past 12 months it appears that, more than ever, buyers from around the globe are taking an interest.
With strong demand from both domestic buyers and international investors, Portugal’s housing market looks set to remain busy.
But what’s driving demand?
A strong international interest
As a country, Portugal attracts the attention of buyers from around the globe. And the options are diverse. Its capital Lisbon has been ranked 16th on the PWC list of Most Attractive Cities for Real Estate Investments in 2022. And the Algarve has long attracted those wishing to have a European holiday home, or take advantage of the strong rental demand in the region.
In 2021, 2,036 people moved to Portugal under the Golden Visa program. Thirty-seven percent of them came to Portugal from China, 25 percent from Russia, 11 percent from South Africa, 8 percent from Turkey, 7 percent from Brazil and 11 percent from other locations, including the UK.
While changes to Portugal’s Golden Visa program may dent investment in some locations, there are still alternatives to buying in rural areas, and a wealth of investors are ready to take advantage of the strong returns.
Supply vs Demand
According to Idealista, the number of homes on the market for sales fell in 16 districts in the first three months of 2022. With a limited supply comes higher demand, particularly for properties which still qualify for Golden Visa requirements.
The need for homes is not diminishing, but recently there have been dramatic drops of available property coming onto the market—pushing Portugal house prices higher as eager buyers search for a home.
And while prices may be increasing, Portugal is still one of the most affordable countries to live in. According to Numbero as of January 2022, Portugal is the 64th most expensive country to live in the world—which fell from 50th in 2021.
Rents are rising too
For investors looking for a solid return, the performance of Portugal’s rental market is incredibly attractive.
Cost per square metre in rental increased by 2.4% year-on-year in April 2022, and by 2.2% in March. In locations such as Lisbon or Porto, average rental returns can sit between 3% – 5% per annum, which is very much piquing the interest of those who are looking to generate a reliable source of rental income.
All of the indications show that the country still offers one of the most attractive locations for investors. Whether you are looking to own a holiday home, provide a stable revenue stream through rental income, or want to enjoy long-term property growth, Portugal is the ideal location.
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