Britons Continue to Buy Tourist Housing in Portugal, Despite Brexit

 

08 August 2017

The British continued to buy tourist housing in Portugal in 2016, largely in central Algarve, leading foreign investors with almost a third of transactions, despite Brexit, according to data from the SIR-Residential Tourism.

 

According to Confidencial Imobiliário, which manages SIR-Turismo Residencial, that result confirms that “Brexit did not negatively affect the demand for tourist housing in Portugal by UK investors, contrary to what would initially be expected” with the departure from the United Kingdom from the European Union.

The British were the most representative nationality among foreign investors, accounting for 31% of the number of transactions, followed by France with 19% and northern European countries with 17%.

At the Albufeira-Loulé (central Algarve) area, the most important market for residential tourism in Portugal (44% of the real estate market attracted by SIR-Residencial Tourism), “the British not only carried out almost half of transactions of international origin, as they reached the highest “average investment ticket”, with around 2.1 million euros per transaction, according to a report from Confidencial Imobiliário.

That amount is almost double the average investment of 1.1 million euros by the Chinese, the country with the second highest investment with regards to international acquisitions in that area of the Algarve (13%).

Confidencial Imobiliário also highlights the countries of northern Europe, with a 7% share of purchases by non-residents and an average investment of 1.5 million euros.

In the total domestic market for residential tourism (Atlantic coast, central, windward and leeward Algarve), “the average investment ticket of UK buyers declined in the post-Brexit period”, from 1.4 million euros in the first half of 2016 to 1.1 million euros in the second.

Confidencial Imobiliário explains this decline saying that British demand has started targeting smaller houses but not lower quality housing, since, despite the decrease in the average ticket, the average unit purchase price in the two semesters remained close to 3,800 euros per square meter.

According to the director of Confidencial Imobiliário, Ricardo Guimarães, “these figures show that the UK investment not only did not suffer from Brexit but even increased its share among international buyers in the second half of the year.”

The most evident consequence of Brexit is related to the devaluation of the pound, reflecting the contraction of the average value of investments by the British, which fell between the first and second semesters, although in the resorts between Loulé and Albufeira the average value is has been maintained, he adds.

SIR-Turismo Residencial is a statistical system that covers the buying and selling of residential tourism properties, developed by Confidencial Imobiliário in partnership with the Portuguese Association of Resorts (APR), with the support of Turismo de Portugal.

The focus of the system includes assets for first sale or resale, located in tourist villages, tourist apartments, tourist complexes, hotel-apartments and other dwellings that are purchased by tourists for seasonal use or as an investment activity.

Original Story: RTP Notícias / Lusa

Translation: Richard Turner