Foreign buyers: 20% of the transactions
Foreign buyers purchased 35,000 homes in Portugal last year, representing 20% of all transactions. Although this is a slight decrease from the 25% it represented in 2017, the proportion is still extremely high compared to other countries such as Spain or France which also attract many foreign buyers.
- 180,000 homes sold in Portugal in 2018
- Out of those, 35,000 Portuguese homes bought by foreigners
Foreigners pay 20% more than Portuguese buyers
Foreigners pay almost 20% more for real estate in Portugal, than the Portuguese buyers. Indeed, the average transaction by a foreign buyer us at € 160,000, almost 20% higher compared to the national average of € 134,000.
Market size of foreign buyers: 5.6 billion euros
So let’s do some maths. With an average price of €160,000, and a number of purchases at 35,000 last year, we can calculate that foreign buyers in Portugal represent a 5.6 billion euros market.
- €160,407 x 35,000 homes = € 5.6 billion
Market size of the Portuguese real estate market: 24 billion euros
Comparatively, the Portuguese real estate market weighs 24 billion euros in transactions.
- 178,691 homes were sold in Portugal in 2018 (500 per day)
- Average transaction: €134,000
- Market size of the Portugal real estate market = 24 billion euros
International buyers weighed 23% of the market, and not 20%
Therefore we can come to another conclusion: although foreigners represent 20% of the number of transactions, they represent more in monetary terms. Indeed, the €5.6 billion acquired by foreign buyers in Portugal represents 23.3% of the €24 billion euros worth of transactions.
- Foreign buyers represented 20% of the number of transactions in Portugal
- However, international buyers weighed more than 23% of the market!
Average real estate prices in Portugal
Average real estate prices in Portugal stand at €1,215 per square meter. However, what are the prices in Lisbon, Porto or Algarve? What is the evolution? Here are the key facts:
- Average real estate prices in Lisbon: €3,010 per square meter
- Average real estate prices in Porto: €1,610 per square meter
- Average real estate prices in Algarve: €1,520 per square meter
- Details per neighborhood => click here to see more
- House prices in Portugal rose 15.6% in a year
- However the IMF expressed a concern about a too rapid growth, suggesting a potential fall in prices is very likely from now until 2023
Top nationalities of foreign buyers in Portugal
Where do foreign buyers come from? Clearly, geopolitical and geo-economic factors are very important. Just consider this: in 2012, the top 5 foreign buyers in Portugal was: United Kingdom, France, Germany, Switzerland, Angola. But in the latest figures (APEMIP), Brazil is a strong #3, equal with the United Kingdom:
- France (21%)
- United Kingdom (18%)
- Brazil (18%)
- Germany (9%)
- China (7%)
- Other countries: 27%
Which again is very different from the previous rankings (Idealista) in which Switzerland frequently came as #4 or #5.
So, what happened? Well, for one, Brazil is now going through a difficult period. Interest rates are at 8%, and over 3 million Brazilians now live outside of their home country. Indeed, see below the Brazilian diaspora. What’s more, a country such as the United States might not seem as welcoming to foreigners as it was before. What does that do? Arguably, it strengthens the interest of Portugal.
Golden Visas in Portugal
Golden Visas in Portugal are not as important as you may think. Indeed since 2012, when the measure was introduced, only around 7,000 golden visas were granted. Comparing this to the 35,000 foreign buyers who purchased a Portuguese property just last year, you can see that this golden visa isn’t such a big deal. Indeed, the BBC even titled an article “Are golden visas losing their sparkle?” recently.
Anyway, what is a Golden Visa and how can foreigners get it? Under this programme, foreigners can gain permanent residency, and then full citizenship after six years. However to secure this Golden Visa, foreign buyers have to invest €500,000 in the Portuguese property market, or €1m in the wider economy, or create a business that employs 10 or more people.
Mostly, we can say that this government programme allows approximately 1,000 foreign buyers to get a residency in Europe, each year since 2012. By nationality, the Golden visa was allowed to people from:
- China (4.211),
- Brazil (722)
- Turkey (336)
- South Africa (291)
- Russia (258)
However, we can’t deny the importance of this programme. Indeed since 2012, the Golden Visa programme has brought over 4.2 billion euros worth of investment to Portugal, with 6,962 Golden Visas for investors and 11,815 Golden Visas for relatives of investors. Therefore on average, this programme which started in October 2018, generated 700 million euros worth of investment of Portugal. What’s more this programme is no stranger to the success that Portugal knows with Chinese buyers and Brazilian buyers.
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