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Why Invest in Property in Portugal?

Ranking amongst the likes of France and Spain as top second-home destinations for the British, Portugal is rightly labelled a prime overseas property location. Boasting cloudless skies, fantastic golfing facilities, cheap flights and a low cost of living, Portugal has much to offer property purchasers seeking a strong real estate market with high rental potential.

Property in Portugal entices lovers of sun-kissed beaches and world class golf, while easy accessibility via budget flights as well as year round sports activities all contribute to Portugal’s success. Property purchasers seeking an alternative to France or Spain are finding Portugal property is lower in price, while bargains are to be picked up in the mini emerging markets of rural paradises north of Lisbon.

From rugged hillsides, ravines and rivers to golden cliffs, pristine golf courses and long sandy beaches, Portugal satisfies all tastes, making it traditionally a top tourist and property location. With ongoing improvements to its road infrastructure and increased accessibility via many budget airlines, many areas of Portugal are now opening up, offering fresh new markets for discerning buyers looking for fresh hotspot locations at affordable prices.

Portugal Property Market Overview

The Portugal property market has long been popular amongst British buyers who have traditionally favoured the southern shores of the Algarve as a destination, where some 50,000 properties are now British owned. As a member of the European Union since 1986, Portugal is regarded as a safe bet amongst purchasers seeking a well established and stable economic climate in which to invest.

One of the beauties of Portuguese property lies in the diversity of opportunities available to suit all tastes and budgets: Property located in the popular golf resorts of the Algarve is now priced high, some at multi-million levels, while you’ll find very little to buy for less than 100,000 GBP. As a general guide, a good standard two bedroom apartment will cost approximately 200,000 GBP. Lower prices can be found further north towards Lisbon and the Silver coast where an emerging property market is in progress due to a new motorway linking the area easily to Lisbon and the rest of the country.

As a new trend emerges for well located rustic, rural properties, many of which are in need of some restoration, property further north along the Green Coast, beyond the beautiful city of Porto can be purchased for as little as around 30,000 GBP, but do remember that the weather is not as warm as further south.

Meanwhile if it is top class golf facilities you are after, then the most popular spot remains the Algarve, between Lagos and Tavira, where the country’s most prestigious golf courses can be found, all within easy access of Faro airport. Heading east from the airport, property on the eastern Algarve is still around 30% cheaper than further west, with three bedroom villas priced at around 150,000 GBP. Property in and around Lisbon and along the coast at fashionable Cascais is also priced high.

Portuguese Property Investment

Growth rates in Portuguese property have slowed over recent years in the popular hotspot regions but investors still consider Portuguese real estate to be a stable investment certainly for the medium to long term. Due to its popularity as a tourist and retirement destination, the Portuguese property market is historically buoyant and conducive to long term profits.

Portugal’s overwhelming success as a golfing haven is a major factor in the country’s continued capital growth figures as golf properties continue to be highly sought after due to the fact that they are also located in areas of low density and outstanding beauty. In some key areas of the Algarve rental yields are known to reach up to 10% per annum while this year predictions for at least 10% per annum capital appreciation are not uncommon, provided the property is situated in a high demand hotspot location.

The birth of healthy emerging markets in up-and-coming northern locations of the country runs alongside the more mature and fashionable Algarve and Lisbon coastal markets, to create a variety of options to cater for all investor needs.

Reasons Why Property in Portugal is a Good Investment

  • One of the lowest costs of living in the EU, though prices are slowly creeping up as Portugal regularizes its tax policies with the rest of the EU
  • A highly appealing tourist location and quality of life conducive to a peaceful retirement destination
  • Stunning and diverse natural beauty, from rivers, cliffs and clean sandy beaches to mountains and championship golf courses, making it popular with all kinds of visitor
  • Interesting history and cultural heritage with a wealth of tourism potential throughout the country
  • Well trodden property market place, with stability and transparency in buying procedures for foreign purchasers
  • English is widely spoken
  • Over 300 days of sunshine per year
  • Lowest crime rate in Europe and stable political climate
  • Construction density limits in the Algarve set at 8%, guaranteeing preservation of the natural environment
  • The largest area covered by golf courses in southern Europe
  • Growth rates of around 10% per annum and rental yields of maximum 10% in key locations
  • Easy access via budget airlines (2 ½ hours flight from the UK) and an advanced road infrastructure
  • Interesting new markets emerging on the Silver Coast, north of Lisbon, at lower prices than in more traditional locations
  • Founding member of NATO
  • Member of European Monetary Union since 2002

Homebuyers in Portugal

The vast majority of homebuyers in Portugal seek golf properties – often off-plan options – while approximately 90% of all foreign property purchasers buy in the highly popular Algarve. Here they can enjoy vast green spaces, excellent local amenities, as well as currently the highest capital appreciation figures and a good buy-to-let market. Whether golfers or retirees, homebuyers are also attracted by the relaxing lifestyle, excellent climate, quality of life and relatively lower cost of living.

As there is still a shortage of residential property on the Algarve, the property market remains stable. Meanwhile many other holiday homebuyers and re-locators now prefer to seek out idyllic rural retreats away from the popular hotspots of the south and are finding some outstanding opportunities in more northern locations, while being within easy reach of Porto International Airport.

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