Summer Buyer’s Guide: Portugal
In the first of our weekly buying guides, we consider Portugal as your next summer-home investment
Alongside Ireland and debt-stricken Greece, Portugal was one of the hardest-hit countries during the dark days of the eurozone crisis, when its government was left with little choice but to beg for bailout money to stay afloat.
Unlike Greece, whose economy is teetering on the brink, Portugal has come a long way since enduring a two-and-a-half-year recession. While this nation of 10 million still has some distance to travel, it’s not in bad shape. For one, the Portuguese economy grew by 1.5% in 2015, and is expected to expand by 1.6% this year.
As a result, Portugal’s housing market is on the road to recovery, with prices almost 10% higher than their lowest ebb in 2013. Sales, too, are continuing to increase at a steady pace.
Does this mean it’s time to invest in Portugal?
An Easy Path for Foreign Buyers
Like many other countries caught in economic turmoil, Portugal recognized the importance of attracting foreign buyers to aid recovery. For this reason, it introduced several measures, including an attractive “Golden Visa” program that grants residency permits for anyone buying a home valued at €500,000 (about $556,000) or above. This has proved especially popular with Chinese buyers, who account for 80% of the visas granted since the program went live in 2012.
However, be warned that some new buyers may find themselves waiting. According to Bloomberg, a backlog in the program may take up to five years to clear.
Certain Regions Are Outperforming
According to Savills, the global real estate consultancy, while Portugal’s national housing market is witnessing tentative signs of improvement, high-end homes in the Algarve region—famed for its beaches, watersports and golf resorts—have outperformed the rest of the country in recent years.
Sales have recovered from a low in 2012, with significant increases in both 2014 and 2015. In Quinta do Lago, for example, where the very best properties have exceeded their pre-crisis peak, the number of transactions rose by 70% between 2014 and 2015.
The Algarve is particularly popular with the British, who make up nearly two-thirds of Quinta do Lago’s residents. (The Irish, French and Germans are also fans.) International tourist arrivals grew by 4.4% in 2015 to reach 1.2 billion, creating a robust market for rentals.
Savills believes that, while many wealthy individuals remain fully invested in so-called “first-tier” cities (e.g., Hong Kong, London, Singapore), where future price gains appear uncertain, buyers are turning to second-tier cities and leisure retreats like the Algarve for growth prospects.
Yolande Barnes, head of world research at Savills, said, “Characterized by low levels of supply and a product tailored to the luxury second home market, the prime Algarve is positioned to benefit from deepening demand from established source markets in the years to come.”
Photo: Nature Reserve Ria Formosa, Lagoon Quinta do Lago
Sabine Lubenow / Getty Images
On the Market in Portugal
Location: Loulé, Portugal
Price: About $12.1 million
Located in the Algarve, at the southern end of the country, this modern villa is equipped with amenities fit for entertaining. Dotted with lounge chairs, the backyard features a swimming pool and terraces that overlook the neighboring golf course.
Location: Albufeira, Portugal
Price: $14.23 million
This six-bedroom luxurious ocean-front property boasts stunning views of the Atlantic and the Algarvian coastline from almost every room.
Location: Loulé, Portugal
Price: Available Upon Request
This unique seven-bedroom, seven-bathroom castle and grounds was 25 years in the making. Located in central Algarve, the property features 20,000 square feet of living space—and beautiful sea views.
Location: Cascais, Portugal
Price: $16.5 million
This traditional chalet was originally built as a royal summer home in the late 19th century and has been owned by the same “noble Portuguese family” for the past century.
Location: Lagos, Portugal
Price: $9.67 million
Situated between the sea and the Boavista golf resort, on the outskirts of Lagos, this modern four-bedroom, five-bath home sits on nearly 15 acres of land.