British attorney Ian Richardson was looking for a sunny vacation home, but he was turned off by what he found during his searches in Spain and France.
Spain’s Marbella was too limited, with “little historical and cultural interest,” and the prime resorts on the French Riviera seemed “ruined a bit,” says Mr. Richardson, chairman of the Optivi Group, a London-based beauty and wellness conglomerate. So in 2015, he decided to buy an apartment in Portugal in a new building in Estoril, a seaside suburb a 30-minute drive from the capital.
“It ticks all the boxes,” he says. “I love the nice weather, and the fact that it’s near Lisbon but not in it.” He also likes “the rich history and culture” of the wider metropolitan area of the capital.
The 57-year-old paid $2.8 million for a 2,150-square-foot unit with three bedrooms and 3½ baths in the Atlântico Estoril Residence, a midrise luxury glass building also housing the new InterContinental Estoril hotel. He spent an additional $560,000 on a custom interior by Lisbon architect Cristina Santos Silva, who works on luxury residential projects in greater Lisbon. The home includes bespoke furniture and direct sea views.
Sunny, hilly Lisbon and its environs are in the middle of a magic decade, as growing interest transforms the capital from a quaint, sleepy outpost into what some are calling the next Barcelona. International buyers, in particular, are helping to revive the once-moribund housing market and causing price surges in select Lisbon neighborhoods.
Perched at the wide Tagus River estuary, Lisbon is a warren of winding streets hugging a cluster of hills—offering a variety of dramatic views from grand terraces. The city has a cosmopolitan flair, and its former imperial ties mean vivid cultural influences from Brazil, Asia and Africa. Fans of Portugal are attracted to its unique Atlantic riff on a Mediterranean lifestyle. They appreciate the country’s new minimalist design as well as its traditional cuisine.
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Along the so-called Portuguese Riviera west of Lisbon, Europeans are finding sunny conditions away from the instability and overdevelopment of other popular Mediterranean spots. They join a long line of wealthy Lisbon natives who have left the city behind for the adjoining beach suburbs of Cascais and Estoril, as well as the nearby mountain community of Sintra, a romantic stamping ground for 19th-century royalty.
“We have reached precrisis levels,” says Rafael Ascenso, director of Porta da Frente, the Portuguese real-estate agency affiliated with Christie’s International Real Estate. He says foreign buyers now make up about three-quarters of the city’s high-end market. The prime areas of central Lisbon, he says, have increased as much as 15% just in the past year.
Lisbon’s size is deceptive. The compact city proper has a population of about 550,000, but the vast metropolitan area—surrounding the Tagus estuary and stretching up the region’s Atlantic coastline—is approaching three million.
Greater Lisbon’s appeal is its dramatic diversity of lifestyles. Steep, centuries-old streets give the city proper its signature charm, while a near subtropical setting gives the Portuguese Riviera’s coastal and mountain areas a resort-like allure.
The high-end real-estate market starts in the city’s historic inner districts, including Chiado, the commercial heart of the former imperial capital, and Príncipe Real, a nearby hilltop neighborhood with grand palaces and humble townhouses, now known for upscale shopping and hipster hangouts.
Lisbon lawyer Inês Lamego, 30, has her elegant Príncipe Real apartment on the market for $2.2 million. She plans to move to a bigger and grander home-and-office complex, with her parents, in the nearby Campo de Ourique neighborhood.
PHOTO: FRANCESCO LASTRUCCI FOR THE WALL STREET JOURNAL“Chiado has gone through lots of changes,” says Portuguese entrepreneur João Teixeira Gomes. Mr. Teixeira Gomes, 68 years old, is the former CEO of Microsoft Spain. He has long divided his time between Portugal and various foreign postings, using his refurbished 19th-century Chiado apartment as a second home. These days, he and his Brazilian wife, Andrea Bonamico, 49, split their time between Lisbon and São Paulo. The couple just sold their multilevel, three-bedroom, 3,228-square-foot Chiado apartment to relocate to São Bento, a short walk away. The new home has outdoor areas the Chiado apartment lacks.
Mr. Teixeira Gomes originally bought the Chiado apartment—with its own four-car garage and a private elevator—for about $560,000 in 1998 and then spent another $337,000 on a renovation. He just sold it for $2.8 million.
“Lisbon is now in the middle of a nice mix,” he says, citing its “creativity, safety and great weather.”
Brazilian and French buyers play primary roles in the high-end second-home market, says Lisbon architect Mariana Morgado Pedroso, who specializes in refurbishments of historic properties.
She says she recently renovated a three-bedroom, $1.7 million home for a São Paulo couple in Lapa, the central embassy district. They spent $135,000 on a new interior, she says, and plan to use the 2,690-square-foot apartment as a vacation home.
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In Príncipe Real, above Lapa, Lisbon lawyer Inês Lamego is selling her apartment: an early 19th-century duplex sporting an Asia-influenced, 21st-century makeover. Ms. Lamego—who spent time as a child in South China’s Macau, once a Portuguese colony—bought the four-bedroom, 3½-bathroom apartment in 2004 for $1.35 million and spent $506,000 on the renovation. The asking price is $2.2 million.
Ms Lamego, 30, is planning a grand upgrade of a Lisbon mansion in the nearby Campo de Ourique neighborhood. She is converting the home into an 18,300-square-foot complex that will include her law office and a home for herself and her parents.
Also in Príncipe Real, Vasco Matias Correia and his wife, Patricia Ferreira de Sousa, 30-something principals in Camarim Architects, paid $160,000 in 2007 for a derelict two-story house and replaced it with a 2,206-square-foot four-story home—at a cost of $337,000. The house isn’t for sale, but similar homes in the area are selling for about $1.35 million, says Gustavo Soares, of Portugal Sotheby’s International Realty.
The facade is made of sea-green tiles designed by the couple. The two live in the three-bedroom, three-bath home with their two children, ages 4 and 1. Nearby is the Jardim do Príncipe Real, a small historic park experiencing a burst of vitality. “Now people really go there,” says Mr. Matias Correia. “We think of it as our front yard.”