Lisbon – Portugal’s colorful and historic capital city – is fast becoming a hotspot for investors. In fact, Lisbon was named the number one market to watch in a 2019 property survey. But why is Lisbon so popular, and should you invest?
Property prices are low for a European capital
Firstly, for a European capital city, Lisbon is surprisingly affordable when it comes to buying property. Average property prices are around € 3,375 per square meter, compared to € 10,175 per square meter in Paris and € 4,115 in Barcelona.
You can find one-bedroom apartments in the heart of the city starting at around € 120,000. Villas start at around € 250,000. Plus, with property prices in the city continuing to rise, there is high capital appreciation potential.
High rental yields
Lisbon is a recognized and secure market, making it an ideal location for investment. As the city grows in popularity both with tourists and investors, demand for accommodation is outgrowing supply. Therefore, owning a property in the city will bring you in good rental yields.
Long term rental yields for an apartment in the Lisbon district can range from 4.5% -6.7%. Smaller apartments and short term rentals can earn even higher returns. The best places to buy in the Lisbon area for high rental returns are Cascais, where apartments can produce fantastic returns at 6.7%, and Oeiras, where villas generate returns of around 6.15%.
Portugal’s capital welcomes around 4.5 million tourists every year, with 2019 being Lisbon’s busiest year for tourism. So, there will be plenty of people eager to rent out your property!
As well as tourists, Lisbon is becoming a tech-hub with many ‘digital nomads’ choosing to set up base in the city. These are people who work from their laptops, wherever they are in the world. Portugal actually offers a digital nomad visa for this very reason as a way to attract freelancers and entrepreneurs.
Excellent quality of life
Apart from the obvious financial gains that can be had in Lisbon, if you choose to live in Lisbon yourself, your quality of life will also benefit!
Lisbon is a sunny city, with 2799 hours of sunshine each year. As well as plenty of vitamin D, you will also enjoy a plethora of opportunity, stunning scenery and lots of history. In 2020, Lisbon actually won the European Green Capital Award for its urban sustainability and progress towards environmental transformation.
So, all in all, Lisbon is an excellent place to invest. Be aware that if you want to take advantage of Portugal’s Golden Visa scheme (in which you can obtain residency in exchange for an investment of € 500,000 or more), then you will need to make your investment before June of this year. After that, the government will no longer allow those who invest in populous areas, like Lisbon, to obtain the Golden Visa.
If you would like further advice on the selling process in Portugal, download your free Portugal Guide.
Why not split the cost and double the fun of owning a holiday home in Portugal by buying with family or friends? Read our guide to Buying Abroad with Family
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