The recovery of Portugal real estate market began in 2014. Prices for Portugal property continue to rise, as the country's economy continues to recover from the worst recession in living memory. According to data published by Statistics Portugal (INE), the country saw house prices rise by 3.84% (or 2.97% in real terms) in October 2016, compared to 2015. At the close of the year the average square metre cost 1,081 euros or US $1,130.
Seen by property type, prices for Portuguese villas increased by 4.77% or 3.89% in real terms, and apartments in Portugal increased by 3.31% or 2.44% in real terms in October 2016, seen in a year-on-year comparison with 2015.
Lisbon has become the European destination of choice for tech entrepreneurs and digital nomads. Lisbon property for sale grew in prices by 2.59% or 1.72% in real terms year-on-year in October 2016, now costing on average 1,308 euros or US $1,367 per square metre. Indeed, house prices improved in all of Portugal's 24 urban areas, with Santa Maria da Feira seeing the highest growth rate of all with 12.2% during that period.
Demand has also increased steadily. Total transactions recorded increased by 15.8% to 31,535 year-on-year in October 2016, according to INE data.
As far as foreign buyers are concerned, Portuguese property is excellent value for money, even when buying in the Algarve or in Lisbon city centre. While a 120 square metre apartment in the beautiful Algarve may come with an average price per metre of 1,786 euros (October 2016), and a 120 square metre Lisbon apartment for sale costs 2,543 euros per square metre on average (same period), in Madeira the square metre costs just 1,205 euros on average for a similar-sized apartment.
While gross rental yields from Algarve-based apartments are quite moderate, ranging from 3.5% to 3.8% (Global Property Guide data from September 2016), Lisbon apartments saw gross rental yields ranging from 5.4% to 6.2% last autumn. The country's economy has continued to improve since then, and rental yields have followed suit.
You can read the full article here.