Influx of Affluent Foreigners in Portugal continues
The mobility of citizens has become global in recent years, and Portugal has stood out on the world map. Foreigners with high financial capacity have entered the country through the Golden Visa and the Non-Habitual Resident regime, as well as other residency authorisation models. Evidence of this is that since 2018 until 10th April, a whopping 26,525 D7 visas have been issued, a Portuguese daily has revealed.
According to Lisbon-based Diário de Notícias, on October 30th of last year, an exclusive door was opened for digital nomads, through which about 800 remote workers have already entered. In both cases, the nationalities with the highest number of visas issued were American, British, and Brazilian. These data, provided by the Ministry of Foreign Affairs, confirm the attractiveness of the country on the international stage and, consequently, the pressure existing in the housing market.
The country has welcomed nearly 27,000 wealthy individuals since 2018.
Last year, foreigners bought nearly 11,000 houses, spending a total of 3.6 billion euros, as reported by the National Institute of Statistics. The Algarve and Greater Lisbon were the regions that attracted the largest share of investment, in a year where housing prices increased by 12.6% - the highest recorded increase. Conversely, in Lisbon, the international market accounted for 37% of the 2.4 billion euros invested in residential real estate, which amounts to almost 900 million euros, according to Confidencial Imobiliário. Not only do foreigners continue to generate significant purchasing volume, but they are also very active in the rental market. This demand, combined with domestic demand, has resulted in an increase in rental prices. At the end of 2022, new rental contracts saw a 10.6% increase. Another sign of a booming market is that rental properties in Lisbon are already the subject of competition.
According to Eduardo Miranda, president of the Portuguese Association of Local Accommodation (ALEP), "in central areas of Lisbon, the main driver of rental demand is foreigners." The demand is so high that "most of the houses that leave Local Accommodation (AL) are immediately occupied." The market is under such pressure that the same property receives multiple offers. "They try to increase the price. It's not an auction, but the houses are highly contested," he says. Since the pandemic, over three thousand houses have left the Local Accommodation sector in Lisbon and have not returned. "A large portion has shifted to medium-term rentals (over 30 days)" to cater to this mobile foreign population.
To conclude, it appears that Portugal continues to establish itself as a sought-after destination for foreigners, trends are likely to shape the country's housing market and contribute to its economic growth in the years to come.
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