Portugal remains a hotspot for real estate investors
While concerns globally and particularly in the euro zone have increased due to inflation, tightening of monetary policies, rising interest rates, skyrocketing construction costs and declining purchasing power, however, Portugal remains a sought-after investment destination amongst global real estate investors.
Over the last year, the country located on the Atlantic coast of the Iberian Peninsula in southwestern Europe has witnessed a significant rise in demand for real estate and global investors consider it attractive and resilience remains the watchword in a scenario that tends to be post-pandemic.
Over 20 million annually tourists visit Portugal annually —a remarkable quantity of visitors for a country with just over 10 million residents. With an economy on solid footing and tourists and foreign investment in the property sector pouring in, the rental market in Portugal continues to go strong. Tourism comprises an impressive one-fifth of the country’s total GDP, and rental yields are around 5.5 percent.
Portugal remains a hotspot for global real estate investors, thanks to the greater ROI in the property sector as compared to its rivals.
In an interview with the country’s property portal Idealista/news, Jorge Bota, who was recently elected president of ACAI – Association of Real Estate Consulting and Valuation Companies, accentuates that “Portugal continues to be very attractive, not only because of the quality of its assets, but also because it offers better rates of return than our main competitors”.
Indicating that real estate has served as a robust investment in times of crisis, “Real estate has demonstrated its resilience, not only because it is an investment asset for longer cycles, but also reflects the performance of the economy like no other, which has not been brilliant in the last decade, but has remained positive”, Bota said. “On the other hand, real estate has the clear advantage of being a physical, tangible asset that, despite crises, continues to exist, even if its value may have been momentarily affected”.
Conversely, house prices in the country have surpassed wages by 47.1 percent in 2022’s Q1, making Portugal the OECD (Organisation for Economic Cooperation and Development) country with the biggest difference between the two values.
Economists have warned that household incomes are not at par with house prices and have raised eye brows that the gap between the two is getting wider. For those unaware, house prices in Portugal have exceeded wages by 47.1 percent in the very first Quarter of this year, making Portugal the only country of OECD where the household incomes vis-a-vis house prices difference is the biggest.
based on metrics like property rights, regulatory obstacles, tax burden, and more, Portugal scores in the top quartile worldwide.
Based on property related metrics, the country scores in the top quartile globally.
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