Lisbon: International buyers vitalize the property market
Hamburg, 15 November 2022. Lisbon is the political, cultural and economic centre of Portugal, and is famous for its historic buildings and vibrant culture. Throngs of tourists visit the picturesque capital every year, which boasts a superb quality of life, a Mediterranean climate and beaches that are just a short drive from the city. The high level of tourism also attracts a correspondingly high number of property buyers: “The real estate market in Lisbon is getting more and more popular. The city has become one of the top destinations of choice for many digital nomads since the pandemic. They are drawn by the mild year-round climate, the moderate cost of living, the convenient connections to other major European destinations, and the city’s many coworking spaces. The majority of digital nomads live here for between six months and a year. They tend to opt for small apartments in the city centre,” reveals Vanessa Moreira, Managing Partner of Engel & Völkers Lisbon. Since the end of October, the Portuguese government has introduced a "digital nomad visa". This will give remote workers outside the European Union the opportunity to live and work in the country for a period of 12 months. To secure such a visa, they must earn at least four times the Portuguese minimum wage (approx. 2,800 euros per month).
The low crime rate, high level of security and quality of the education system, together with monetary government incentives, all make Lisbon an attractive investment location. The Portuguese capital is enjoying growing popularity. Many companies are drawn by Lisbon’s thriving status as a technology hub, and the city has increasingly become a centre for start-ups as a result. This is also due, alongside the strong pool of local talent, to real estate costs still being moderate compared to many other countries. Even though the Portuguese are the strongest group of buyers in Lisbon at around 75 percent, the number of international buyers is steadily increasing. Approximately 25 percent of investment activity can be attributed to an international buyer group. In the market segment for luxury properties valued at over 1 million euros, Brazilians are the nation most interested in purchasing a property in Lisbon, followed by buyers from North America, Germany, the UK and France. The areas of Alcântara, Parque das Nações, Penha de França and São Vicente are particularly sought after among investors.
The Santo António neighbourhood is one of the most exclusive residential districts in Lisbon. It is known for its historical monuments, traditional shops, and trendy cafés and bars. Top prices for apartments in Q1 2022 reached 12,500 euros per square metre, while top prices for detached and semi-detached houses were as much as 3.36 million euros.
Just outside the centre lies the Estrela district, which is very popular with locals. It is home to a number of museums and famous sights including the Basílica da Estrela, a former Carmelite monastery dating from the 18th century, and the Jardim de Estrela park, one of the city’s most beautiful green spaces. Top prices for contemporary apartments were 10,800 euros per square metre in Q1 2022. Prices for houses in this part of the city peaked at 3.4 million euros. The neighbourhood is especially sought-after among families looking for a home here. They are drawn by the security it offers, as well as the diversity of natural surroundings and waterfront settings. Prices of up to 15 million euros were also paid for collectors' properties.
The upmarket residential district of Avenidas Novas is situated in the heart of the city centre and is particularly desirable among Lisbon’s upper middle class. Foreign investors and expats are attracted by the countless cafés, shopping centres and excellent infrastructure. In Q1 2022, top prices per square metre for freehold apartments were approx. 10,000 euros. Prices for detached and semi-detached houses reached up to 2.75 million euros during this period. For very special properties, prices of appartments and houses of up to 10 million euros have been achieved in this neighbourhood.
Despite the fact that real estate markets are being impacted at the moment by events on the world stage, the last months have shown that interest in residential real estate in Lisbon remains high. In defiance of rising inflation and slightly increasing prices, the demand for real estate is still growing all the time. “Real estate continues to prove a safe investment. The rise in interest rates has so far not had a significant impact on the number of residential property transactions. Prospective buyers are still willing to pay the current market price, especially in prime locations. With this in mind, we predict that demand will continue to remain strong in the long term, and that prices will stabilise at a high level in 2023,” says Vanessa Moreira.
