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The Growing Market for Luxury Homes in Lisbon
17 December 2017
The luxury residential market is increasingly dynamic, and investors are looking for new areas of interest in Lisbon, such as Poço do Bispo, Almirante Reis, Belém and even the south bank.
Private Luxury, a real estate brokerage firm that focuses on the luxury segment, reported turnover in 2016 of nine million euros and expects to generate 40 million euros in 2017. The results demonstrate that the prime residential market in Portugal is in full swing.
The company has 200 properties with a market value above one million euros in its portfolio, including a property that is on sale for 53 million euros and another, that isn’t being publicly shown, for 115 million euros.
Filipe Lourenço, the CEO of Private Luxury, views his firm’s 17 years of operation in the Portuguese prime market in a very positive light. The executive said that the centre of Lisbon is currently the most sought-after area, causing prices to accompany the high market demand. “This situation must, in our opinion, be cautiously assessed. There has to be some restraint in the valuation of real estate because there are many cases where prices are well above the absorption capacity of the market,” he believes.
The executive says that this situation delays sales and, not infrequently, causes them to be readjusted, which is not positive for any of the players in the market.
Regardless, Filipe Lourenço guarantees that demand for property in the centre of the Portuguese capital is strengthening and showing that Lisbon, “alongside many other European and even world capitals, is a city that is generating interest. It is sophisticated, and its premium/luxury real estate has enormous potential.”
The CEO pointed out that there is substantial demand for properties in the Cascais-Estoril area and also stated that there is an increasing interest by international investors in other regions in Lisbon that had been ignored until recently, such as Poço do Bispo, Almirante Reis, Belém and even the south bank, among others.
According to Private Luxury’s experience, existing demand is highly diverse, depending on the region. In the case of Lisbon, the highlight goes to luxury apartments and palaces, for family residence. Following in its heels is the search for buildings for investment (rehabilitation, resale or short-term rental).
In the Cascais-Estoril-Sintra line, the demand focuses mainly on houses with singular characteristics and also palaces, whose purpose is, mostly, residential.
In the Alentejo, there is a demand for sizeable agricultural production properties (over a thousand hectares), mainly for the exploration of cork, pine, olive and vines, primarily destined for export.
The profile of investors in luxury real can also be very different. Filipe Lourenço explains that, on the one hand, there are institutional investors, owners of large companies in Portugal or abroad, with an extremely rational and professional investment strategy. On the other side, some individuals want to invest in relatively safe assets but have a less elaborate approach, where the profitability/business factor does not figure so prominently. Finally, there are clients who have money, but no clear strategy. They only want, for a variety of reasons, a house in Portugal.
The perspectives for the future are even better. “However, we are always aware that one of the characteristics of the real estate market is volatility. In these 17 years of activity, there have been some fluctuations. Regardless, in the luxury segment, volatility is not as high. We even had one of our best years in the period between 2008 and 2013, not counting this 2017,” he recalled.
The growth of tourism is also boosting the dynamism of the luxury market segment. “Given the interest in Portugal as a safe destination for investment and as the best country in Europe to live, we are confident in our prospects for the future,” Mr Lourenço concluded.
Original Story: Jornal Econômico – Fernanda Pedro
Translation: Richard Turner