The last real estate paradise

The water in the villa's pool in the Portuguese city of Braga, a good three-and-a-half hours' drive north of Lisbon, shimmers azure blue. The sunlight reflects on the dark parquet floor between the fireplace and the wooden staircase that leads to the first floor. The 280 square meter villa has a total of four bathrooms and six bedrooms.

The best thing about this current offer from the real estate agent Engel

Rising inflation, higher building interest rates and the explosion in the cost of building materials are currently putting the real estate industry under pressure. The boom in the real estate sector, fueled by zero interest rates and cheap money, is coming to an abrupt end due to the economic consequences of the Russian invasion of Ukraine. Demand and prices are already falling. At least in Germany and Western Europe.

In Portugal, on the other hand, there can be no talk of an end to the real estate boom. “Compared to Germany and France, where prices are showing a slight decline for the first time since mid-year after the inexorable boom of recent years, Portugal is expected to continue the pace of growth in home selling prices in 2022 ", says Marcus Walthaner, Managing Director of the real estate broker iad Germany.

Walthaner expects the number of houses sold to increase by a good ten percent in 2022. According to Walthaner, the Portuguese housing market already set a record in 2021 and grew by 16 percent compared to 2020.

Engel comes to a similar assessment of Portugal's exceptional position in the European real estate market

But why is Portugal of all places able to defy the downward trend in the real estate industry? And is it still worth starting now?

For Juan-Galo Macià, CEO of Engel

In addition, according to Macià, the price level of real estate in Portugal is moderate compared to the German market and offers investors good entry opportunities.

Last but not least, the rising prices in Portugal also result from the stagnating supply. The lack of workers, the increase in construction costs and lengthy approval procedures are affecting new construction and are acting as a price driver for existing properties.

Demand is primarily driven by foreign customers. "International customers currently account for 63 percent of purchasing activity in Portugal," says Macià. The majority of foreign buyers come from France, Great Britain, Brazil, Germany and China.

The Portuguese market is particularly attractive for international buyers thanks to the so-called "golden visas". Since 2012, foreign investors have been able to obtain both a permanent residence permit and citizenship for a five-year real estate investment of at least EUR 500,000. The government is hoping for growth in regions with low population densities such as Comporta, Douro and Alqueva.

But where is it worth entering the Portuguese market? If you are looking for bargains, you won't find anything in Lisbon. Along with the Algarve, the capital is one of the most expensive regions in the country. But there are also insider tips.

“Apartments with a living space of 120 to 140 square meters and two to three bedrooms are particularly popular in the city center of Lisbon. Due to their location in relation to tourist hotspots, such properties are in high demand,” says Macià von Engel

Properties in Santo António, Estrela and Avenidas Novas are also particularly popular. "In the coastal regions, traditional Mediterranean-style villas with sea views and pool facilities in the price range of 400,000 to 600,000 euros are very popular with international buyers," says Macià. The expert recommends Comporta, which is located south of Lisbon directly on the coast, as an insider tip.

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