The Portuguese Real estate market is not as viable and famous as its counterpart in Spain; Portugal has a reputation for being the relaxed and calm nation of the Iberian Peninsula. According to historical statistics, the purchase of a home in Portugal is renowned for not yielding a massive return on investment as it is a clear matter of lifestyle, but there has an upward trend which negates this school of thought.
Here is the primary reason for the trend; the prices of properties were significantly reduced in the coastal resorts and major parts of Europe after the 2007 market peak and the boom years. Prices of hot spots that had overheated within that period have reduced by 40-50 percent as evident in the Western and Central Algarve. Other locations that seem not to be concerned with this challenge are okay with the idea of new developments which are in abundant supplies.
WHERE TO PURCHASE
The Portuguese Real Estate market bottomed out in 2013/14, and there has been a stabilization of prices afterward. According to the quarterly report of the RICS/Ci Portuguese Housing Market Survey, the dearth of properties plays a significant role in reinforcing the prices of properties. The costs of houses are expected to grow on an average of 5% per year in 2017. In fact, the presence of mortgage and increased domestic demand has helped in buttressing this fact.
Analyzing the Portuguese real estate for buyers who come from abroad is pretty easy as various slots are available for purchase. These places include Porto, Lisbon, the Algarve and the other parts of the country depicted as rural regions with the presence of foreign purchasers. There are different locations such as Costa Verde (which is not far from Porto), Silver Coast, and Alentejo.
The capital city, Lisbon is expected to witness a reduction in the prices of properties. Prices of real estate in Lisbon experienced a massive rise of 30% between 2012 and 2015 but have reduced drastically last year, and there is a projection that these prices may not increase at a similar rate with other locations that are not on the same category with it regarding demand levels and average prices. It is also important to note that prices have increased to €10,000 per square meter in places like Chiado while the rates in other renowned localities are not up to €5,000 per square meter. In the first half of 2017, Porto recorded a massive sales volume than the Algarve as more buyers from overseas saw the golden opportunity in the second largest city of Portugal. The prices for remodeled housing units in that place are valued at €3,000 to €3,500 per square meter.
MAIN BUYERS IN THE PORTUGUESE REAL ESTATE MARKET
The British dominate the list of purchasers while other citizens of Northern Europe and Scandinavians form part of the group. The population of French citizens is increasing in the major cities like Lisbon and the Algarve. It is also essential to give credit to the golden visa program introduced by the Portuguese Government which has made the influx of nationals from China, Turkey, and Brazil to Lisbon and these individuals have been investing heavily in the Portuguese Real Estate Market. These people are seen in Lisbon, and a few of these foreigners are in the Algarve. Moreover, influential and affluent buyers from the United Kingdom and other nations have been attracted to the country as a result of the non-habitual residency scheme.
If we analyze the preferred market of the British real estate investors which is the Algarve, it will be observed that demand has varied in the past few years and also the western and eastern fringes have been added to the new development areas instead of the central part where the era of development commenced.
The prices of most areas of the western Algarve situated close to the famous Lagos have related prices with locations around Albufeira and Vilamoura. The “Golden Triangle” section located at the resorts of Quinta do Lago and Vale do Lobo seems to be the costliest with a price projection of €10 million and above. Those individuals who cannot offer payments for highly-priced resorts have to settle for places close to Loule.
The influx of the French buyers has seen the prices in the eastern part of the Algarve grow steadily as these individuals are in need of homes nothing more than €300,000. If you are on a small budget, you can check the location behind the coast to have a feel of the village life where you will acquire a lovely home at a cheaper rate.