– Soaring Prices –
While property prices had fallen by nearly 30% nationwide between 2008 and 2012, they have since surged, fueled by strong demand from foreign buyers seeking a better quality of life and tax exemptions.
This surge is especially visible in Lisbon:
“In two years, prices have increased by 20% and they will keep rising — there’s still room for growth,” estimates Pascal Gonçalves.
A 160 m² apartment in the traditional Alfama district recently sold for €420,000 — double its value a decade ago. In Chiado, the heart of the capital, a 100 m² two-bedroom apartment was sold for €900,000 — a previously unthinkable amount.
In Porto, the major city in the north, business is also booming:
“In just one year, I’ve seen my income double. I now earn four times what I did in my original profession as a biologist,” smiles Isabel Leitao, 33, a real estate agent for six years.
Some real estate networks saw activity jump by 36% over the first nine months of the year.
Industry professionals believe that “prices in Lisbon are likely to stabilize soon, as they are starting to outpace the income levels of Portuguese residents.”
– Threat of a Bubble? –
Is a real estate bubble looming over Portugal?
“No, we are still far from that. Yes, prices have increased in Lisbon, but they are still significantly lower than in Paris or London,” assures Economy Minister Manuel Caldeira Cabral.
While the average price of an apartment in Lisbon has risen to €3,607 per square meter, it remains more than twice as low as in the French capital (€8,400/m²).
Despite the rising prices, the enthusiasm for Portugal remains strong. Among foreign investors, the French now top the list with 27% of purchases, well ahead of the British (18%).
This buying frenzy has captivated European retirees, who benefit from a ten-year tax exemption on pensions, provided they reside in Portugal for at least six months per year.
And despite the arrival of a socialist government supported by the radical left — which has undone several reforms of the previous right-wing administration —
“No changes are expected,” says the Minister of the Economy