Foreigners Buying Homes in Portugal Are Not Crowding Out Local Buyers

19 January 2018

The influx of foreigners who are buying homes in Portugal is not crowding out Portuguese buyers from the property market, mainly because foreigners are most interested in older homes in the major cities’ historic centres, the director of the real estate agency Keller Williams (KW) Portugal said yesterday.

“Foreigners are buying in places where the Portuguese where not known to buy, mainly in the historic centres,” Lusa Eduardo Garcia e Costa stated, noting that there are foreign citizens who buy homes with the intention of living in Portugal and others who come as tourists, and then end up buying a second home.

According to the executive, who spoke to Dnotícias on the sidelines of a KW convention in the Algarve, buyers from other countries “do not compete with the Portuguese because the Portuguese prefer to buy new homes.” Local buyers were most affected when “there was no longer any new construction going on in Portugal, which is now resuming”.

According to Mr Garcia and Costa, foreigners who opt to live in Portugal are not, for the most part, buying much in big cities, but in the Algarve, west of Lisbon or Cascais, which were “typically places for second homes.”

KW Portugal’s director general spoke to Lusa during a conference held by the firm, which is a training and consulting firm specialising in real estate mediation. The event will continue until Friday at a hotel in Albufeira, bringing together about 400 participants.

The company, which began operations in Portugal three years ago, currently has 1,500 consultants and expects to reach a total of 2,500 by the end of 2018, the year in which the executive expects property sales to reach 2 billion euros.

“We have grown much more than the market, principally due to our business model. We are not a ‘player’ in that we have many agencies spread across the territory, we have few, but large locations,” he explained.

Mr Garcia and Costa classified the conjuncture that allowed the growth of the real estate market in Portugal as “a perfect storm, in the positive sense.”

He attributes the real estate boom to many factors, including tax incentives for retired people from northern Europe, golden visas and also Portugal’s “discovery” by tourists.

“We benefited from a macroeconomic phenomenon at a time when real estate prices were very low,” he said, noting that, although we cannot yet refer to an “absolute recovery”, the “deepest part of the crisis” has passed.

However, he believes that as the change is recent, there is “a great deal of uncertainty” about the future of the real estate market in the country, whose growth will slow down.

Having opened six new centres in 2017, a year in which the company took part in 1.2 billion euros in real estate transactions, the director general of KW Portugal expects to reach a maximum of 50 ‘market centres’ in Portugal in 2018.

KW is present in 29 countries, and this year it should expand to six new locations: Romania, Argentina, Czech Republic, Greece and Cyprus, said Bill Soteroff, CEO of KW Worldwide, of which KW Portugal is a part.

According to the executive, Portugal is the top country for the company outside the United States, the country where KW was born. This includes the total number of offices and employees.

Original Story: Dnotícias.pt / LUSA

Translation: Richard Turner