Property prices in Portugal continued to rise throughout 2021 as the demand for both land and developments increased, and investor confidence grew. But what is the property market looking like now and what might it look like throughout 2022?
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What are the current property trends?
Demand for commercial real estate particularly boomed in 2021. One consultancy firm crunched the numbers and found that around €1.1 billion were invested in commercial spaces between January and December 2021.
For residential real estate, demand for housing in the outskirts of cities grew and is expected to increase in 2022 as people continue to move out of the city and into homes better equipped for home working.
Investment from foreign buyers also continues to grow, with Portugal’s border agency SEF reporting that over 10,000 visas have been issued since 2012 and over €5.3 billion has been invested in the country.
Demand for sustainable homes is expected to increase in 2022. And, with pandemic-related restrictions disrupting travel over the last few years, demand is also expected to increase for homes in culturally rich areas, such as Lisbon’s Marvila.
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What are house prices looking like?
According to Eurostat, house prices in Portugal have risen by 57% in a decade. Price growth did slow slightly during the height of the pandemic; however, prices still grew 9.9% year-on-year between July and September in 2020 and 2021.
In October 2021, the average property in Portugal cost €1,251 per square metre. In Lisbon metropolitan area, prices rose by around 8% year-on-year in October 2021 to an average of €1,659 per square metre. During the same time, in the Algarve, property prices rose by 6% to €1,673 per square metre.
Rental prices have also increased by 25% in a decade with the median rent from new leases growing by 7.4% in the third quarter of 2021 compared to the same period in 2020, to €6.08 per square metre.
Who is buying property in Portugal?
According to consultancy firm JLL, the Portuguese represented 60% of real estate transactions in 2021. In terms of foreign buyers, it was the Brazilians, English, North Americans, French and Spaniards who purchased the most Portuguese real estate last year.
Patrícia Barão, Head of Residential at JLL, explained the reason for this range in nationalities: “The changes to the golden visa programme to come into force as of January 2022 have pressured international sales, diversifying the range of active nationalities”.
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