Profitability of Premium Real Estate in Portugal attracts National and Foreign Investors
- Foz do Douro and Nevogilde, in Porto, are the areas with the highest price.
- Foreign buyers dominate acquisitions in the Algarve.
- Lisbon continues with strong demand from investors.
- Premium segment prices in Nazaré with significant boost.
ONE Engel & Volkers publishes the results of its Market Report Portugal, a report that analyzes the real estate operations brokered by the German multinational in the period 2020-2021 in real estate markets in Lisbon, Porto and Vila Nova de Gaia, Algarve and Oeste. As the most exclusive areas of Lisbon and Porto, they continue to register strong demand, but the study shows that other areas of the country with premium segment offers, mainly on the coast, continue to arouse the interest of buyers and investors, national and international.
Juan-Galo Macià, President of Engel & Völkers for Spain, Portugal and Andorra, considers that “Portugal can and should continue to take advantage of its exceptional conditions compared to other markets with increasingly efficient management. The offer will be able to grow in luxury areas in the interior of the country, as well as real estate in the Azores archipelagos, in order to impact the change in Golden Visas”, he adds.
For the next two years, Juan-Galo Macià anticipates “a challenging context in an environment of rising interest rates, for the first time in 11 years, and given the new economic and social risks facing European economies”, but believes that there are few alternative investment savings that can compete with the profitability offered by the more premium segment.
The noble areas of Foz do Douro and Nevogilde are the areas in Portugal with the highest average price in transactions brokered by Engel & Völkers, respectively 5,000 euros/m2 and 5,100 euros/m2. This contributes to the size of the plots, the quality of the houses – old, historic and rehabilitated houses – and the entire surrounding landscape, which make these areas unique for high-income families. Foreign buyers also favor Foz do Douro, which also explains the fact that almost all operations in this area are permanently destined.
The Historic Center is chosen for its history, proximity to the river and the mystique associated with old, historic and rehabilitated houses. Bonfim, Cedofeita and Centro Histórico register a high demand for investment, representing around 30 and 20% of operations.
Lisbon
Unsurprisingly, the most central areas of Lisbon are the ones with the highest average prices in transactions brokered by Engel & Völkers in the capital. Based on 2021 data, it appears that Santo António is an area with the highest average price per square meter – 4,892 euros. They are followed by Avenidas Novas (4,672 euros), Misericórdia (4,653 euros) and Campo de Ourique (4,441 euros), Campolide (4,439 euros) – which registered the biggest increase, of 34.19% – and Estrela (4,325 euros). Although most operations are aimed at permanent housing, some areas of Lisbon are highly sought after by investors, namely Alcântara, Parque das Nações, Penha de França and Vicente.
Algarve
The Algarve region continues to be the destination of choice for foreign buyers. In Portimão, for example, nine out of 10 property purchases brokered by Engel & Völkers were carried out by foreign buyers, with Germany, England and Sweden occupying the top places. In Vilamoura and Quarteira, which has an average price per square meter (3,367 euros/m2), foreign buyers represent 75% of Sweden’s operations, with France and elevation in the spotlight.
The Carvoeiro and Porches area is among the areas with an average average price (3,471 euros/m2) and attracts the highest French and Swiss people. In Alcantarilha / Armação de Pera there is a strong predominance of Belgians and English.
In the leeward Algarve – Faro, Olhão, Tavira and Vila Real de Santo António – demand for second homes predominates. Faro Island is one of the most sought after destinations, due to its proximity to the beach, and Tavira is a destination of choice for the Dutch, Swiss, North Americans, Irish and French.
West
The West zone encompasses six distinct territories (Óbidos, Caldas da Rainha, Peniche, Nazaré, Leiria and Alcobaça), with completely different profiles. 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,140 euros for 1,39.4%. Alcobaça and Leiria recorded similar increases – 34.15% and 34.13% respectively – in contrast to Óbidos, which recorded only an increase of 3.26%. However, the highest values are located in Nazaré, where the average price per square meter reached, last year, the threshold of 2,370 euros. In terms of typology, only in Óbidos and Caldas da Rainha there is a demand for villas – with 250 square meters, three rooms and a swimming pool. In all other cities, the choice falls on apartments, with areas between 100 and 200 square meters. Leiria is distinguished not only by the demand for housing in the city centre, but also by being a unique location dominated by national buyers.
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