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Luxury market With Greater Impact on Agencies

13 October 2017

Portuguese are the most prevalent buyers, but they are “competing” with other nationalities

Location, high-quality finishing, the existence of exterior areas and access are some of the criteria that are factored in by people who are looking for luxury property. But, as in the traditional market, demand far exceeds supply, and as soon as opportunities arise, they are quickly depleted.

The “success” of this market is visible in the agencies businesses. The Remax Collection saw growth of 44.2% in the first six months of the year. Their total number of transactions also increased to 481 in total, a growth of 50.5% over the same period last year. Flats continue to be the most sought-after properties, accounting for 58.6% of the business volume and 69.1% of transactions, with houses representing 20.3% and 18.3%, respectively.

According to the agency, Portuguese customers dominate both the business volume (49.66%) and transactions (53.45%), followed by the Chinese (11.88% and 7.47%), Brazilians (10.96% and 10.92%) and the French (7.98% and 6.32%). Arab, Japanese and Turkish citizens complete the list of the top buyers.

“The fact that the Portuguese continue to be the main buyers is revealing that real estate is increasingly seen as a safe investment compared to financial products,” Beatriz Rubio, CEO of the broker, stated.

Much of the Collection market is centred in Lisbon, which includes historically important municipalities such as Sintra and Cascais, with a turnover of 86.22% and a volume of transactions of 87.33%. Faro, Setúbal and Porto are also leaders.

30% of turnover

Century 21 also acknowledges the increase in demand and says that the sector – real estate valued at more than 500,000 euros, with an average price of square meters above five thousand euros – represents more than 30% of the agency’s turnover.

According to Ricardo Sousa, Lisbon, Cascais and the Algarve are the areas with the highest demand, with average transaction values at 800,000 euros.

Regarding nationalities, the agency’s CEO revealed that “the primary buyers of this type of real estate are Portuguese, Brazilian and French clients.”

Most Relevant Areas

Although Era admitted that the luxury property market has limited relevance to its total sales, this year has seen sales of about 130 properties with prices above 500,000 euros. Still, the segment accounts for less than 1% of total sales.

However, João Pedro Pereira, a member of the Era’s executive committee, acknowledged that there are specialised agencies in this segment. The weight of luxury real estate in such portfolios can be much higher, with the percentage of luxury houses reaching 10% of properties sold,” This is the case, for example, in some regions of Lisbon and Porto and Cascais, among others.

According to the executive, the average transaction value of Era’s properties is around 125,000 euros per sale in the mass market, but for luxury properties, homes can be found anywhere between 500,000 and three million euros.

Typically, the most expensive properties are usually most sought after by English, French and other citizens of the European Union. “Recently, we have also seen the number of Brazilian buyers grow,” he says.

Original Story: Sapo – Sónia Peres Pinto

Translation: Richard Turner