Portugal property market booms: prices soar 106% in 10 Years | Portugal Property News November 2024

Portugal's property market bounces back: Transactions up 10.4% in Q2 2024

The Portuguese property market is showing strong signs of recovery, with housing transactions increasing by 10.4% in the second quarter of 2024, reaching 37,125 properties sold and totalling 7,900 million euros. This marks the first year-on-year increase since the second quarter of 2022, according to data released by the National Institute of Statistics (INE).

Old build properties continue to dominate the market, accounting for 80% of transactions (29,630 units), up 10% year-on-year. Although new homes also saw a significant uptick, with 7,495 units sold, representing a 9.8% increase compared to the same period last year.

The regional distribution of sales shows the North leading with 29.6% of total transactions, followed by Greater Lisbon at 18.9%. The Algarve, a perennial favourite among foreign buyers, accounted for 7.6% of all transactions.

Foreign buyers were responsible for 6.6% of purchases, showing a slight decrease of 2.8% compared to the previous year, experts believe this is a temporary blip. The continued interest from international investors highlights Portugal's enduring appeal as a property investment destination.
 

Interest in the Algarve continues to surge

The Algarve continues to be a hotspot for international property investors, according to Engel & Völkers' latest Market Report Portugal. The region is particularly popular among Germans, British, and Belgian buyers.

Lagos, Tavira, and Albufeira-Carvoeiro are leading the charge, with Tavira boasting an impressive 92% of international buyers. It will come as no surprise that the most sought-after properties are villas with 3 to 4 bedrooms, spanning 200-300m², often featuring swimming pools and large outdoor areas close to the beach.

Price increases vary across the region, with Lagos experiencing the most significant rise in 2023. Meanwhile, Vilamoura and Portimão recorded more modest increases of 12%, while Faro and Tavira stood out with bigger increases of 20% and 25%, respectively.

Luís Cavadas, Business Development Executive at Kyero, comments: "The Algarve continues to be the most popular region in Portugal for Kyero buyers, which is a testament to its enduring appeal. With fantastic weather, beautiful beaches, and high quality of life, it’s easy to see why buyers are so drawn to the area. 
 

Royal real estate rumours: are Harry and Meghan eyeing Golden Visa opportunity in Portugal?

Speculation is swirling in the property world as British tabloid The Daily Mail reports that Prince Harry and Meghan Markle may be looking to purchase a house in Portugal's Comporta region. The alleged motive? To acquire Golden Visas, which would grant them free access to the Schengen area in the European Union. While the exact location remains unconfirmed, the couple's previous visit to Comporta, where Harry's cousin Eugenie and her husband Jack Brooksbank reside, has fueled speculation. Brooksbank's connection to CostaTerra and real estate mogul Mike Meldman adds an intriguing twist to the story. If true, this property acquisition could signal the couple's intent to spend more time in Europe following their relocation to the United States and departure from Frogmore Cottage. The Harry and Meghan news comes weeks after it was revealed that Paris Hilton has also bought a holiday home in Comporta. And just last week, Hello Magazine reported that George & Amal Clooney may be following suit. 
 

Portugal's rental market: A tale of two extremes

Portugal's rental market showcases stark contrasts, with prices soaring in urban centers while rural areas offer bargains according to recently released data from INE. The national median rent stands at 7.60 euros/m2, but 106 municipalities boast rates below 5 euros/m2. Inland regions like Vila Flor in Bragança offer the cheapest rents at 2.28 euros/m2, where a 100m2 home costs under 270 euros monthly. Conversely, Lisbon tops the expensive list at 15.63 euros/m2, with a similar-sized apartment costing 1,563 euros. Greater Lisbon, Algarve, and Porto Metropolitan Area consistently surpass national averages, highlighting a significant urban-rural divide in Portugal's rental landscape.
 

Lisbon leads luxury market growth in Southern Europe

Lisbon is cementing its position as a prime destination for luxury real estate, with prices in the high-end segment rising by 4.2% in the first half of 2024. This impressive growth outpaces other major cities in Southern Europe and the Middle East, including Madrid and Dubai, according to Savills' 'Prime Residential World Cities' study.

The Portuguese capital's luxury market is benefiting from continued interest from international buyers, driving the appreciation of high-end real estate in the city. Experts project an additional growth of 2% to 3.9% in the value of luxury real estate in Lisbon for the second half of 2024, due to the mismatch between supply and demand.

The resort sector, particularly in the Algarve, remains a favourite among investors. Confidencial Imobiliário's latest Portuguese Resorts Market Report shows resort house prices rose by 9.8% in 2023, offering attractive returns coupled with lifestyle benefits.

Christina Hippisley, General Manager of the Portuguese Chamber of Commerce in the UK, adds: "There's strong appetite from investors for property in Portugal right now, particularly resort properties. Portugal's wide range of resort properties mean the country has something to meet every investor's needs."
 

Average house prices more than double in a decade

Portugal's property market has experienced a remarkable transformation over the past decade, with average house prices more than doubling since 2013. According to data from CBRE, the average house price has surged from €102,000 in 2013 to €212,000 in 2023, representing a staggering 106% increase. Despite challenges such as rising interest rates, the market remains dynamic, with 37,000 transactions recorded in the first half of 2024, surpassing the 33,000 registered in the same period last year.

Francisco Horta e Costa, CEO of CBRE, explains: "The sustained price growth, even in the face of economic uncertainties, is primarily driven by a persistent shortage of supply. This trend, which began in 2013 with a general decrease in new property construction, continues to support price increases across the country."
 

Portugal scoops up international awards, solidifying its status as a top tourist destination

Portugal has been raking in accolades recently, cementing its position as a world-class destination for food, hospitality, and wellness. At the 2024 World Culinary Awards, Lisbon clinched the title of Europe's Best Culinary City Destination, outshining culinary heavyweights like Barcelona and Paris. The city's diverse food scene, boasting 17 Michelin-starred restaurants, impressed judges and food enthusiasts alike.

Not to be outdone, Porto was crowned Europe's Best Emerging Culinary City Destination. The country's culinary prowess was further highlighted by Vila Joya in Albufeira winning Best Fine Dining Hotel Restaurant in Europe, while José Avillez's Belcanto was named Portugal's best restaurant. Porto was also ranked the 5th foodiest city in the world by Conde Nast Travel readers in their Readers Choice Awards. 

In the wellness sector, the Algarve shone bright, with Vila Vita Spa by Sisley and Pine Cliffs Resort winning national titles at the World Spa Awards.

Rounding off Portugal's impressive showing, the country ranked fourth in Condé Nast's 2024 Readers' Choice Awards for the friendliest countries in Europe, with readers praising its warm hospitality, year-round sun, and delicious cuisine.