Portugal real estate prices continue to rise strongly, amidst improved economic conditions. Property prices in Portugal rose by 3.84% (2.97% in real terms) in October 2016 from a year earlier, to an average price of €1,081 (US$1,130) per square metre (sq.m.), based on figures released by Statistics Portugal (INE). After more than three years of depression, house prices in Portugal started to recover in 2014.
In Lisbon metropolitan area, property prices were up by 2.59% (1.72% in real terms) y-o-y in October 2016, to an average of €1,308 (US$1,367) per sq.m.
House prices rose in all the country’s 24 urban areas. Santa Maria da Feirarecorded the highest increase of 12.2% during the year to October 2016, followed by Oeiras (10.4%) and Barcelos (10.4%), Odivelas (9.9%), Porto (9.7%), Villa Franca de Xira (9.6%), Cascais (8.1%), Leiria (7.8%), Loures (7.7%), and Amadora (7.6%).
Strong house price rises were also registered in Sintra (6.6%), Setubal (6.5%), Gondomar (6.2%), Maia (6.2%), Almada (6%), Lisboa (5.3%), Vila Nova de Famalicao (5.1%), and Seixal (5.1%).
Modest to minimal house price increases were seen in Vila Nova de Gaia (4.2%), Funchal (3%), Braga (2.2%), Guimaraes (0.9%), and Coimbra (0.1%).
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Demand is rising strongly. Total transactions rose by 15.8% to 31,535 units from a year ago in the third quarter of 2016, according to INE.
However, the government’s plan to increase taxes on high-value real estate property in 2017 to pay for higher pensions and state worker salaries makes the luxury property market outlook uncertain.
There are no restrictions on foreign property ownership in Portugal and transaction costs are generally low.
Portugal will grant a 5-year residency permit – the Golden Visa – to non-EU citizens who buy a minimum of €500,000 worth of property. The permit allows holders to work or study, as well as to travel in Schengen countries. They can opt to apply for permanent residency after five years.
The economy is believed to have grown by a meagre 1% this year, and by is expected to 1.1% in 2017, after expanding by an average of just 0.2% in the past 15 years, according to the International Monetary Fund (IMF).
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