Real Estate continues to be one of the most preferred avenues for investment by many around the globe. Investment properties are physically existent, which provide a double layer of security and reassurance, as opposed to intangible assets. The value of a Real Estate property also tends to appreciate over time, especially if the surrounding area grows and develops naturally. While properties can be sold for a lump sum, they can also be used to generate a passive income stream from rental, whether in the residential or the commercial sector.
However, the Real Estate industry in the Eurozone has been experiencing a downward trend in market appreciation. Some countries, like Portugal, have been resisting it, growing, and developing in the face of overwhelming odds.
Portugal’s Real Estate Market Against the Downward European Trends
The general sense of confidence in Portugal for Real Estate investments is directly confirmed by the latest Eurostat findings, the European Union’s statistical office. With an increase of 8,7% in the first 2 quarters of 2023, and 7,6% and 7,8% in the third and fourth quarters, Portugal had, on average, an increase of 8,2% in terms of housing pricing in 2023, when comparing to 2022.
Eurostat’s findings record data from both the European Union and the Eurozone. It is important to note these two are distinct, as Eurozone countries are countries with the EURO as their official currency, and there are European Union countries, like Poland, Hungary, Czechia, and Denmark who have their own currency.
Out of the 20 countries in the Eurozone, Portugal registered the third-highest growth rate in 2023 from 2022. Only Croatia and Lithuania surpassed Portugal, with each country witnessing an increase of around 12%, and 9,8% respectively.
The property prices in the Eurozone, on average, fell by 1,1% in 2023 when compared to 2022. Specifically, Germany and Luxembourg led the charge, where the property acquisitions fell the most, respectively, by 8,4% and 9% from 2022 to 2023. In contrast, Portugal’s tremendous 8,2% growth is a testament to the country’s resilience against European fluctuations and uncertainties in the Real Estate sector, proving Portugal is the right country for investments.
| Q1 2022 - Q1 2023 | Q2 2022 - Q2 2023 | Q3 2022 - Q3 2023 | Q4 2022 - Q1 2023 | Average | |
| Euro Area | 0,4% | -1,6% | -2,2% | -1,1% | -1,1% |
| Portugal | 8,7% | 8,7% | 7,6% | 7,8% | 8,2% |
| Germany | -6,8% | -9,6% | -10,1% | -7,1% | -8,4% |
| Luxembourg | -1,7% | -5,9% | -13,9% | -14,4% | -9,0% |
While the prospect of buying a house, for later to be sold to create a profit is enticing, and more easily achievable in Portugal, there is also passive income to consider through the form of rentals. The same Eurostat report has also concluded that, in comparison to 2022’s 4th quarter, rents had increased by 3.0% by the end of 2023.
A Closer Look to Portugal’s 8,2% Real Estate Market Growth
Statistics Portugal (INE – National Institute for Statistics), the official Portuguese statistical branch, further corroborates the information provided by Eurostat and confirms property prices’ natural 8,2% growth during 2023. Specifically, the cost to acquire an existing house increased 8,7%, while properties for the first time on the market registered a 6,6% uptick.
While this information pertains to the entirety of 2023, the report specifically targets the last trimester of 2023, painting a clearer picture of the recent and positive developments in Portugal. In 2023’s last trimester, the registered increase was 7,8%, a 0.2% increase over 2022’s last trimester, where existing properties saw a boost of 8,1%, and new houses surged by 6,9%.
The report also includes concrete information on how much revenue the Real Estate sector generated – around €28 billion, spread over a total of 136,499 sold properties. Of this total amount, 34,126 were sold in 2023’s final trimester, rounding up to €7,2 billion.
Overall, for 2023, buyers with foreign domicile acquired 10,391 properties, accounting for €3,6 billion of the total transactions. The statistical information about the Portugal Golden Visa is incomplete, and only available up until September 2023. Even so, for 9 months, before the Real Estate option was discontinued in October 2023, the Portugal Golden Visa generated € 409,5 million. This number, while not insignificant, does not even represent 1,5% of the total amount of 28 billion.
The staggering difference only further highlights Portugal’s Real Estate market stability and how it serves as the ideal platform for investors. The Greater Lisbon area by itself, generated €9,1 billion, accounting for 32,3% of the total transactions in 2023. There may be some overlap, but the property price increases in Lisbon are a surefire indicator of how profitable the Portuguese investment property market is.
Investing in Portugal’s Real Estate
Due to Real Estate’s versatility, investors are consistently looking for the most enticing opportunities in the Real Estate industry. For over a decade, Portugal arguably had the best deal on the international market, in part because of the Portugal Golden Visa, which enabled property purchases at a minimum of €280,000 to grant legal Residency status in the country. In October 2023, the Socialist government led by António Costa formally discontinued the option to purchase Real Estate.
The Portugal Golden Visa continues to exist through other options, among them subscriptions to investment funds.
At the time, many considered Portugal’s Real Estate market would crash and fall without the Golden Visa. More than 6 months have passed by, and the Portuguese Real Estate market is as strong and as resilient as ever, further boosting Portugal’s reputation and truly cementing it as an international stronghold for investments, especially in the Greater Lisbon area.
The extreme demand for investments in the Portuguese Real Estate is understandable, as the country incarnates the dream of having it all in a single location. Among many other reasons, Portugal stands out from the rest due to being one of the safest countries in the world, having one the cleanest air qualities in Europe, an excellent healthcare and education systems, affordable prestigious schools, and universities, and having a population with elevated levels of English proficiency.
Read more:
Portugal has the 7th Cleanest Air Quality in Europe
Healthcare System in Portugal: A Key Benefit for Expats and Foreigners
What are the Best Schools in Portugal for my Children?
Best Business Schools and Universities in Portugal
Portugal is the 8th Most English Proficient Country
Plus, in recent developments, Portugal has facilitated the path toward Citizenship acquisition. Whereas before the process could be delayed and take up to 6 or 7 years, Portugal now holds the fastest path toward Citizenship, effectively only taking 5 years, from the moment the Residency application is submitted.
However, for all its advantages, the Real Estate sector in Portugal is lacking in some areas. While the demand is high, the supply is low. There is an expected 700,000 vacant houses in Portugal, an issue that has contributed to the ongoing housing crisis in Portugal, and the general housing conditions of a large number of properties not being the best. In turn, the property prices of the remaining, suitable, and high-end, luxury houses have further increased. However, it is undeniable the Portuguese Real Estate market has immense potential.
Mátria Co-Working: The Perfect Real Estate & D2 Visa Investment Opportunity
While buying property in Portugal is the best choice for those seeking to settle down in the country for the long-term, Portugal Homes has the best short and medium-term solutions with Mátria Co-Working. Mátria is a Real Estate development project in the Lisbon city centre, just a few minutes away from the iconic Avenida da Liberdade.
Once complete, Mátria will be a fully state-of-the-art seven-storey building with multiple luxury amenities, including private offices, boardrooms, phone booths, a member-exclusive gym, changing rooms, coffee shops, a lounge, and a private terrace. Mátria will undoubtedly become Lisbon's #1 Co-Working space.
As a Real Estate investment, Mátria only requires a single-time investment of €280,000, the same minimum amount the Golden Visa for Real Estate once required. Portugal Homes guarantees a yearly 4% return over a period of 5 years, in one of Lisbon’s hottest areas. The best part about investing in Mátria is that it qualifies for the D2 Visa, which grants Residency in Portugal.
With the D2 Visa in hand, investors can reside awfully in Portugal, enjoy the warmth of the sun, the safety it provides, and breathe in fresh, pure air. Plus, investors can also bask in a myriad of benefits. the ability to bring their family, travel to the 29 European countries in the Schengen Zone visa-free and gain Portuguese Citizenship in only 5 years. Get in touch with Portugal Homes today to find out more about this once-in-a-lifetime opportunity, while Mátria slots are still available!
