Investing in real estate in Portugal can be beneficial and offers the chance to create a “haven” in a tranquil EU nation.
Portugal’s average price per square meter is €2,950. If they want to be eligible for a Portugal Golden Visa, investors must purchase property for at least €280,00. A lavish home on the shore, though, costs at least €100,000.
Portugal has some of the most affordable real estate in all of Europe. According to recent data from the National Statistics Institute, the average price of a square meter of real estate in Portugal is just EUR 1,187 – EUR 1,243 for apartments and EUR 1,090 for houses. This contrasts with EUR 2,649 in the UK or EUR 2,300 in France.
But regional prices for real estate differ substantially. The two most affordable areas are Centro and Alentejo, where you can purchase real estate for less than EUR 1,000 per square meter. House prices in these two regions are slightly higher than those in the Algarve.
This region, which includes cities like Evora, Elvas, Coimbra, and Aveiro, is a good place to start if you’re looking for deals.
The Algarve is truly golden
The Algarve has the highest prices and the most foreign interest. Investor interest in the “Golden Visa” program, which grants a long-term Portuguese residency permit to anybody investing over EUR 500,000 in property, peaked in the Algarve’s “golden triangle” region between Vale do Lobo, Quinta do Lago, and Almancil. The average price per square meter in this area is EUR 1,524, though you’ll typically pay more on the shore and much less even a few kilometers inland.
Lisbon area
The greater Lisbon region ranks highly as well, which is not surprising given Lisbon’s importance as the country’s capital, its financial hub, and a popular tourist destination. Lisbon is the costliest city in Portugal to purchase larger residences, with “T3” (three-bedroom) flats costing EUR 1,430 per square meter.
The northern region of Portugal, which includes the prosperous city of Porto and the island nations of Madeira and the Azores, appears somewhere in the middle.
These prices are, of course, averages across broad geographic areas. The cost of living is significantly greater in significant cities; huge apartments in Lisbon’s center should cost at least EUR 2,500 per square meter. Porto typically costs more than smaller Norte cities, too.
Will the price growth last
Observers question the long-term feasibility of current real estate prices. Younger Portuguese are finding it difficult to buy their first homes, and there is a shortage of new buildings in many areas.
Portugal’s economy is booming. Government debt is down, the economy is growing, and unemployment is down. The IMF anticipated a slightly lower GDP growth of 1.7% in 2019. The yield on Portuguese 10-year notes may show how far the country has advanced since the financial crisis.
Portugal paid 18% in 2012 to borrow from investors. By 2016, it was 2.3%, and it’s presently around 1.9%. The underpinnings are solid despite slower development.
At 24 times, European house prices to GDP per capita are low. The UK and French property values are 74 and 41 times the GDP per capita, respectively. Investors shouldn’t worry about the Portuguese housing market losing momentum.
