Real Estate prices have been rising across Europe over the last few years. Whilst the Pandemic hit many businesses hard and caused economic turmoil for lots of industries, it seems to have had the opposite effect on the property market, boosting property prices in many locations. Being locked up for months has really driven many to make changes to their lifestyle, homes, investments and assets. The pandemic forced many people to re-evaluate the way they live and where they live in ways we would never have imagined before. Not only amongst locals looking to upgrade their homes but for many global investors looking for a ”Plan B” second residency to escape their country should they ever need to. Some nation’s lockdown measures were so strict, it has spurred many individuals to look for a backup residency in a more liberal country that may offer more freedom should a similar situation take place again.
In 2021, Portugal saw an overall price increase of 13.8% according to a recent article in The Portugal News. Lisbon has also been ranked 16th on the PWC list of most attractive cities for Real Estate investments in 2022. Not only have house prices increased, but rental returns have too. House rents per square metre increased by 2.4% in April 2022, compared to April 2021, and 2.2% in March. The average rental return in areas such as Lisbon and Porto can be between 3 – 6% with many developers offering investors the security of a guaranteed rental return of 3 – 4% p.a.
According to recent data from Idealista, the number of houses for sale in Portugal fell in 16 districts, between the first three months of 2022. This could partially be down to the changes in the Golden Visa legislation, meaning some real estate projects would no longer qualify for the programme and may have been removed from the market. But this is also a trend we are seeing across Europe, including neighbouring country Spain. With limited stock available, demand is currently higher than supply and in turn is driving the prices higher. General inflation is also adding to the cost of building materials and driving construction costs higher than ever.
Golden Visa projects are more limited since the legislation change at the start of the year, particularly the options that qualify for the lowest priced golden visa category at €280,000. When these project come to the market they are selling quicker than ever before. With prices continually rising and limited stock to offer, we advise investors to act fast to secure a property now in order to gain the optimum chance of capital appreciation in the future.
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