For years, Portugal’s Golden Visa program has attracted hordes of foreign investors keen to secure European residency by investing in the country. But to the dismay of many, it was announced that in 2023 the programme will end. The big question now is, what impact will the end of the Portugal Golden Visa have on the housing market?
Impact on Housing and Tourism
Portugal has introduced the ‘More Housing’ scheme to tackle housing issues and regulate the real estate market. The scheme includes a ban on Golden Visas and restrictions on short-term holiday rentals, also known as Airbnb-style rentals. The primary aim is to increase the availability of affordable housing for local residents in high-demand areas.
However, these restrictions on short-term holiday rentals apply only to apartments and are not enforced in low-density areas. This is because the government wants to encourage tourism and economic development in less populated regions.
For investors interested in the Portuguese market, properties in lower-density areas could still be attractive for short-term holiday rentals without restrictions. Additionally, they can explore other investment opportunities in commercial real estate, tourism projects, or long-term residential rental properties throughout the country.
Last year alone, Golden Visas bought over €530 million in investments according to statistics from the Portuguese Association of Residential Tourism and Resorts (APR), a non-profit that promotes residential tourism in Portugal.
Historically, the past activity of the Golden Visa has been centred on larger cities such as Lisbon and Porto. However, back in 2022, the program was restricted to areas outside many “property hotspots” and excluded the major cities to focus investment in less densely populated areas.
Luckily for foreign buyers, many areas of the Algarve—Portugal’s sunny southern coast—remain open to Golden Visa investment.
The ban is still to be debated in Parliament, but it looks likely to go ahead. Last weekend, the final wording of the bill was published, stating that the Golden Visa will remain open to applications until the law is passed. Any applications submitted before the cut-off date will be honoured, meaning investors should act now to obtain a visa via the program.
The Golden Visa has been used to purchase 11,000 homes in Portugal over the last decade, but this only equates to around 4-5% of all transactions. Looking at the bigger picture, the ending of the Golden Visa will by no means hinder Portugal’s booming market.
Factors Driving Portugal’s Market Forward
Portugal’s housing market continues to thrive thanks to a variety of factors. The country’s stunning climate, iconic beaches, and rich cultural heritage have made it a coveted tourist hotspot, leading to a surge in demand for holiday homes and rental properties.
Additionally, Portugal’s robust economy has seen steady growth over the past few years; bolstering consumer confidence and fuelling a booming middle class, both of which are driving continued demand for housing. Overall, the country’s market shows no signs of slowing down anytime soon—with or without the end of the Portugal Golden Visa.
Other Visa Routes for Foreign Investors
For prospective foreign investors, there are alternatives to the Golden Visa. Portugal offers a range of attractive visa routes for those seeking residency. Among these options, one avenue involves making certain investments in specific regions of the country, including tourism projects or startups. On top of this, Portugal’s membership within the European Union means that citizens of other member states are free to establish roots and pursue work in the nation with ease.
For more information on buying property and securing residency in Portugal, get in touch today.
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