Miguel Montez Tabuado
Real Estate Specialist
Sep 13, 2023
The Real Estate Market and Property Prices in Portugal
In the past few years, Portugal has become a popular destination for international property buyers. Portugal is proving to be an excellent investment opportunity for those looking to enter the real estate market. With a growing economy, low mortgage rates, and a dynamic real estate market, it's easy to see why investors are turning to Portugal for their next property investment. Around 70% of buildings in the country were built before 1991, making it an ideal location to invest in renovation and rehabilitation projects. This trend has led to the creation of modern, energy-efficient Portuguese homes and has contributed to the country’s economic growth.
Furthermore, the existing conditions of the Portuguese economy are conducive to the growth of the rental sector, aided by recent reforms to the rental law. These changes have facilitated the streamlining and acceleration of eviction proceedings, among other benefits.
However, investing in real estate, especially in a foreign country, can often be an overwhelming experience. Before diving into the real estate market and property prices in Portugal, it's crucial to answer some common questions potential buyers might have, such as bureaucratic obstacles like the changes in the Portugal Golden Visa program.
In this article, we will examine the essential aspects of buying and residing in property in Portugal's two most popular cities, Lisbon and Porto, to guide you through the process and ensure a seamless transition to your new home in these beautiful areas.
Portugal Golden Visa and Real Estate Investment: What are the changes?
The Golden Visa is one of the easiest pathways to residency in Portugal, provided you have the funds to invest, and does not require the person to live in Portugal. A Golden Visa is obtained via investment, and the most popular investment used to be real estate.
However, new regulations were implemented and finalised by the Portuguese government on July 19, 2023, to be implemented by August or September 2023.. These changes changed the terms and requirements for obtaining the Golden Visa. In the past, buying property of minimum 280, 000 euros would qualify someone for a Golden Visa, but now only Fund Investments of 500, 000 euros is accepted. The government claimed that these changes were necessary to distribute foreign investment more evenly across the country, and to address the real estate and rental issues.
There are other ways to obtain residency, and you can buy property then, since Portugal does not place restrictions on expats or immigrants buying a house for personal use.
The Real Estate Market in Portugal: Lisbon and Porto
The real estate market in Portugal tends to vary depending on the region, so it's important to work with someone who truly knows the ins and outs of the local market.
Buying Property in Lisbon
Lisbon, a city rich in history, stands tall as one of the world's oldest, with tales and myths ingrained into its walls. As the capital of Portugal, it comprises a substantial part of the nation's populace, constituting 27% of its overall inhabitants.
Lisbon is also known for its cosmopolitan and diverse atmosphere, serving as the economic, cultural, and political center of the country. With its ancient architecture as a canvas, it paints a vibrant picture of modernity, pulsating with life and energy, that attracts young adventurers and seasoned souls alike.
Investing in a property in Lisbon to enter the Golden Visa program is no longer a viable option due to the new restrictions in place. However, if you are interested in buying a vacation home or a house to live in Portugal, you can do so since Portugal does not impose any restrictions on property ownership for personal use.
Property Prices in Portugal: Lisbon
Lisbon's steady rise in prices is a testament to its vitality and growing reputation as a solid investment opportunity in all of Europe.
Between July and September of 2021, buying a house in Lisbon cost about 3,205€ per square meter, which is a significant increase of 11.4% from the previous year. As a result, Lisbon is still the most expensive city in Portugal to live in or buy property in. The Santo António district is the most expensive, with a value of 4,889€ per square meter, while Santa Clara is the cheapest at 2,090€ per square meter.
Buying Property in Porto
Porto is the second largest city in Portugal and a historical gem that will transport you back in time. Its roots run deep, dating back to the Roman Empire when it served as an outpost. Its rich past earned it the honor of being proclaimed a World Heritage Site by UNESCO in 1996. But Porto's charms don't stop there. The city's urban fabric stretches to the glittering shores of the Atlantic Ocean, giving you the best of both worlds. And let's not forget about the wine - the delicious, world-renowned Port wine that bears the city's name. With its cellars in Vila Nova de Gaia, Porto was the hub of packaging, transport, and export of this fortified wine that's loved by so many.
But just like the rest of Portugal, buying property in Porto does not give you the residency permit anymore, as of July 2023’s official amendment to the Golden Visa. However, you can explore your residency visa options and then purchase a property for personal use.
Property Prices in Portugal: Porto
Porto is a thriving hub for new industries, including the cultural sector, making it a city with an abundance of both commercial and residential developments happening all around. With other prime locations in Europe commanding high prices, Porto's affordable pricing is an added advantage.
In Porto, real estate prices have risen at a faster pace than in Lisbon. The increase was 18.2%, compared to Lisbon's 11% in 2021, making the average square meter cost €1,802, according to the INE. Despite the rapid rise, buying a house in Porto remains significantly cheaper than in Lisbon (at €2233), whereas in Lisbon the average square meter cost €3,205.
If you're planning to purchase a property in Porto, it's worth noting that the Union of the parishes of Aldoar, Foz do Douro, and Nevogilde have the highest prices, with an average of 2,414€ per square meter, up 7.3%. On the other hand, Campanhã is the most affordable area, with an average cost of 1,170€ per square meter, although it has experienced an 18.7% increase, higher than the city's average.
What Documents Do I Need to Buy a Property in Portugal?
In order to sign the sales contract, you will need a notary witness present. You will also need the following documents:
- A Portuguese tax number, which can be acquired at any local tax office
- Property Registration Certificate
- Property Tax Document
- License of Use
- Technical Document of the House
- Energy Performance Certificate
- Relevant permits
Conclusion on the Real Estate Market in Portugal
If you are looking to buy a property in Lisbon or Porto, moviinn can help you navigate the process and find the perfect home that fits your needs and budget. Plus, our personalised approach ensures that you receive the highest quality of service throughout your journey. Book a call with us to find out more.