Lisbon is one of the best southern European cities to invest in real estate, placed in front of other history titans such as Athens and Istanbul. The Emerging Trends in Real Estate® Road to recovery report, from PwC and the Urban Land Institute, concluded that leisure and tourism real estate should bounce back strongly from the Covid-19 pandemic related difficulties and accelerated changes. In fact, from the experience here in Portugal Homes we could see that despite the pandemic slowing down a lot of processes in acquiring assets, we were able to adapt quickly and perform with great capacity.
Read our previous coverage of the Real Estate Trends Reports:
Lisbon is a top 10 target for real estate investments in 2020
Lisbon is in 1st place in the top 10 of the European real estate market for 2019
Lisbon to top property shopping list in Europe according to PwC and ULI
Why is Portugal Europe’s new trendy spot?
The pandemic has also reinforced the trend of investors targeting contra-cyclical sectors that profit from megatrends and therefore generate resilient income. Those sectors that are seen to benefit from compelling supply/demand dynamics and strong demographic drivers continue to find favour.
Despite the property industry, on the whole, displaying remarkable agility in navigating the health crisis – and at times, profiting from the altered landscape – this report reveals that the pandemic has changed the business of real estate in a profound and potentially permanent way. An example of this is that industry leaders suspect that remote working may continue to place pressure on the urbanisation trend, although it is not clear for how long. This is a trend that can affect more big cities such as London and Paris, which will probably see the largest change in the use of office space going forward. The cost of occupation is substantially higher there than in other cities.
Price Waterhouse Coopers report states that as European economies have started to recover from the pandemic, there is a clear upturn in confidence among property industry leaders although many are still coming to terms with the radical changes to the business of real estate brought about or accelerated by COVID-19. For many respondents, this means the performance of real estate looks relatively strong for 2022 with higher forecast returns than a year ago.
Europe’s successful vaccination programme is a part of this confidence boost, with the European Centre for Disease Prevention and Control reporting that 75.2% of adults in the EU/EEA were fully vaccinated by the end of October. Portugal is one prime example of this, with over 85% of the adult population vaccinated. As a result, travel has largely resumed within the European Union and between the EU and the UK, and fears of further lockdowns across the European region have diminished.
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One of the main concerns of the population identified by the Emerging Trends in Real Estate in Europe report is climate change concerns and their effect on the companies decision-making processes about the environment they want for their companies and staff. The interviewees indicated that many occupiers still prefer new-build assets to meet their own net-zero targets. In several European countries, it appears to be easier today to obtain financing for new developments rather than refurbishment projects.
Perhaps unsurprisingly, the performance of real estate looks relatively strong for 2022, with 38% of survey respondents predicting higher returns, against 25% in the survey looking at 2021 and 13% the year before that. The post-lockdown bounce-back, promoted by a receding of the virus and government and central bank support measures, have underpinned return expectations in most sectors.
London, the capital of the United Kingdom, stands at the top of the table. This is because instead of focusing on being a financial metropolis, it can start turning to technology and science. The German capital Berlin is the second most attractive European city for real estate investment in 2022, according to the list. Paris (France), Frankfurt and Munich (both cities in Germany) make up the top 5. Demand in these cities is high and, as a result, cities like Lisbon, Madrid, Milan and Amsterdam can continue to benefit greatly from this.
A Portugal Homes possui profissionais muito experientes e conhecedores, que trabalham com alguns dos promotores mais reconhecidos em Portugal . A nossa vasta experiência permite-nos guiá-lo pelas melhores opções de investimento.
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