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Foreign Nationals Bought 25% of the Homes Sold in Portugal in 2017
11 January 2018
152,000 homes were sold last year, an increase of 25% to 30%. The French and Brazilians were the principal buyers.
Mariah Rangel traded France for Portugal. The Brazilian, 62, bought a house in Cascais because she has missed living near the sea and having a boardwalk that is similar to the one in Rio de Janeiro. Tired of big cities, she said that the difference in the cost of living was also a factor: “I bought a 250-square meter apartment in Cascais using 65% of the sales price of a 75-square-meter [apartment] in Paris. Go back to Brazil? I don’t have a reason to,” she confessed to DN/Dinheiro Vivo.
Brazilians, but even more so the French, are the principal international residential property buyers in Portugal. “Foreigners already account for 25% of the market. In other words, foreigners bought a quarter of all of the houses sold,” said Luís Lima, president of APEMIP, the association that represents real estate agencies and developers. The British and the Chinese, with the latter taking advantage of the golden visa program, are also helping to sustain the market boom. And the accompanying meteoric rise in prices.
Last year, sales of homes rose between 25% and 30%, Mr Lima stated. If APEMIP’s figures are correct, that means that 23,500 more homes were sold 2017 than in the year before by real estate developers and agencies. That would be a total of more than 152,000 properties bought and sold.
“That is an increase that falls within our forecasts and leads us to believe that the trend will continue in the coming year,” Mr Lima predicted, adding that the current price per square meter in Lisbon is still far from exceeding the budget of the more moneyed foreigners. Those buyers are attracted by the city’s quality of life, safety, good weather and prices, which are still below those practised in other [European] countries.
Not included in these figures are the 30% of sales that are made directly between private individuals and that should bring the total to 215,000 residential properties sold throughout 2017.
“Rising real estate prices bring attention to the country. Real estate is our golden goose, but we need investment to compensate for the supply shortages faced by the Portuguese middle class,” the executive stated, noting that prices in Lisbon are reaching levels that are out of the reach of all but the wealthiest locals.
And worse, from APEMIP’s perspective, is that the escalation in prices is making the market so attractive that the number of real estate companies operating outside the law is multiplying.
Last month, the price per square meter stood at 2,796 euros in Lisbon, according to the Housing Price Index as measured by Idealista, a rise of 36.92% compared to December 2016 and the highest increase in the country. But just a quick search online leads to properties that are on sale for more than double that price. According to the same index, prices rose by 23.67% in one year in Porto, with an increase of more than 18% in Faro. Overall, the real estate prices advanced 25.09%.
“In Lisbon, the square meter can reach 7,000 euros, and some foreigners are willing to pay that amount,” Mr Lima said. The executive appealed to state and local authorities to create “not social housing, but housing for the middle class,” who have fewer and fewer options for living in large urban centres. These increases are being driven, he added, by foreigners who “are willing to pay above what any Portuguese family could.”
The data from the SIR – Urban Rehabilitation, computed by Confidencial Imobiliário, confirm that between January 2016 and June 2017 every single parish in Lisbon was the target of foreign investment. On average, foreign investors paid 94,000 euros more for a home in the capital than the Portuguese.
Of all the nationalities, “Brazilians are the ones who are always willing to pay more,” Luís Lima stressed, noting that, like the French, Brazilians are investing a little all over the country. “I’ve been in Rio de Janeiro, and they want to leave, they’re leaving Brazil,” says the president of APEMIP.
“Most of the Brazilians are fleeing because of Brazil’s lack of security … These days, I can’t go out on the street. I know of many families who are choosing to live in Cascais and Lisbon,” Ms Rangel stated, adding that her daughter has also moved to Lisbon.
But there are also people from the foreign middle classes moving in. “The vast majority of French people who buy a house in Portugal are from the middle class,” says Cecile Gonçalves, director of the real estate agency Maison au Portugal. The most significant demand comes from retirees, who benefit from much more advantageous tax conditions, or entrepreneurs who want to invest in Portugal. The preference of the majority is focused on the coast, including the Algarve, Lisbon and Porto.
Original Story: Diário de Notícias – Ana Margarida Pinheiro
Photo: Nuno Pinto Fernandes – Global Imagens
Translation: Richard Turner