Rafael Ascenso, manager of estate agency Porta da Frente, sold homes near Lisbon last year to people of 35 different nationalities in a sign of the dramatic change of fortune for a country that was in peak crisis just a few years ago. In fact, following the 2008 financial crash, Portuguese property prices fell by up to 50%.
As part of this new wave, beachside homes in Portugal are becoming as hot as the country’s year-round climate (over 250 days of sunshine are guaranteed a year), with a growing number of the global wealthy looking to invest in one of the world’s best destinations for golf, surfing, vast empty beaches and secure living.
"Globally, Portugal has a great power of attraction,” said Miguel Poisson, managing director at Portugal Sotheby's International Realty. It appeals to high-end buyers for a number of reasons, he said. “The natural beauty of the coastline, from vast white sandy stretches to small coves, offers variety. The country is very safe and private. There is a plethora of Michelin-starred restaurants and fantastic food and wine, easy flight access, excellent roads, health services, shopping and a very good climate.” Mr. Poisson noted that Portugal was one of the top-three most peaceful countries in the Forbes World Global Peace Index in 2017.
Portugal's beachside resorts, particularly on the southern coast in the Algarve, have long been favored by the British and Irish but now non-Europeans are starting to invest more enthusiastically, too. Mr. Ascenso mentions Brazilians, in particular, who share a common language with Portugal, Chinese, South Africans and, increasingly, American citizens, in a trend he started to see last year.
“Portugal is still relatively unspoilt compared to the south of Spain or France, which can feel overbuilt,” said Alison Buechner Hojbjerg, one of the directors at Quinta Properties Savills. “Portugal has been strict with building permission so you have never had an abundance of builds and there are still lots of quiet yoga retreats, agro-tourism destinations, huge expanses of white sandy beach where you won’t see a single property. It is still a little bit of a secret.”
Many foreigners are attracted by Portugal’s Golden Visa Program, which fast-tracks second-home buyers who invest in property (worth at least €500,000, or US$625,750)
to citizenship. Golden Visa holders can also travel within Schengen countries (Schengen comprises 26 European states that have abolished passports and all other types of border control at their mutual borders), without the need to apply for a visa for each country.
Chinese investment in Portugal through Golden Visas has so far amounted to €2 billion (US$2.5 billion), the Foreigners and Borders Service revealed in January, representing 60% of the money raised through the program, followed by €400 million (US$500 million) from Brazilians and €140 million (US$175 million) from South Africans.
Another program that attracts foreign buyers, introduced in 2009, is the Non-Habitual Tax Residency Regime. It exempts non-residents who spend at least 183 days a year in Portugal from paying income tax on non-Portuguese incomes for a period of 10 years. (There’s no inheritance tax in Portugal either).
Below, a look at some of the top resort spots for second-home buyers:
This is where King Luis I, on the throne during the mid-19th century, chose as his royal summer retreat. The nobility built villas and gardens at the similar time, during the 19th century. Since then, the Portuguese nobility have constructed lavish villas and gardens in the area.
Cascais is considered the Portuguese Riviera, with a yacht-filled harbour and high-end restaurants. This is where the wealthiest Portuguese want to live in a variety of homes, from smart architect-designed luxury apartments to townhouses and huge villas with water-views. This area, though, is less resort and tourism based than the Algarve.
Second-home buyers mix with those who live there full time, along winding alleyways or in grand historic homes all within commuting distance of the capital. There are plenty of international schools, shopping centers and a cultural museum quarter, here, too.
Mr. Ascenso said he has seen a spike in interest in Cascais, where he is currently listing a house for €25 million (US$31.29 million). The wealthy area is considered Lisbon’s coastline; many of its residents commute to Lisbon because it is just 25 minutes by car.
Villas are normally sold for between €1.5 million and €6 million (US$1.88 million and US$7.5 million), according to Mr. Asceno. There are also many luxury apartments—the most expensive in this coastline of Portugal per square meter—reaching up to €13,000 (US$16,270).
New Hot Spots
A more rugged and affordable western Algarve is coming into its own.
Mr. Koch de Gooreynd recently sold a house in the small village of Benagil, which received at least 50% more internet inquiries than any other house on the market in Portugal, he says.
Here it is more affordable. A buyer will pay €500,000 to €1 million (US$625,690 to US$1.25 million) for a three- to four-bedroom villa with a pool and a sea view, compared to €2.5 million (US$3.13 million) for the same kind of property in Quinta do Lago.
The views of golf courses from properties are “equally wonderful” and can also command big premiums, Mr. Koch de Goonreynd said, but aren’t as much of a necessity as they are for buyers as they are in central Algarve. The western Algarve, he said, appeals more to those seeking nature and wild views.