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Manors for Sale in Portugal for Four to 19 Million Euros. Who Buys Them?

12 February 2018

There are manors for sale scattered throughout Portugal that cost between four and 19 million euros. Economia Online studied the market in an attempt to learn the profile of investors that are interested in this type of property.

Just a quick search of real estate agencies revealed several mansions and luxury manors, in a style typical of Portugal’s one-time royalty. However, they are not within the reach of all investors. There are small luxury manors with prices that easily exceed ten million euros, spread throughout the country. But who invests in this type of real estate, considering the current real estate market?

A mansion in Lumiar, on sale by the real estate company Quintela and Penalva, is on sale for 7.75 million euros but is far from being one of the most expensive. Built on two hectares in Quinta de S. Sebastião, this small luxury mansion dates back to the 18th century and has been completely renovated. It has two bedrooms, four suites, a chapel and an area with a library, games room and an immense garden with statues, fountains and small lakes. Also, there is also a small house for a caretaker and an additional hunting lodge.

It is difficult to speak of luxury real estate for foreign investors without mentioning golden visas. Recently, the Foreigners and Borders Service (SEF) has shown that, since they began to be allocated, the total investment obtained with golden visas has reached 3.5 billion euros, of which 3.17 billion came from real estate acquisitions. From that date until January of this year, 5,397 gold visas were granted by the real estate acquisition requirement. Chinese investors were the most prominent buyers, followed by the Brazilians.

Luximo Christie’s Sofia Costa explains that “in recent years, several international rankings have rated Portugal as one of the best destinations for investments in real estate as it is increasingly safe and profitable. Besides, the quality/price ratio of Portuguese real estate is one of the best in Europe. These facts have focused the interest of investors on the Portuguese real estate market.”

Of all the properties selected by ECO, this is the cheapest: a mansion in Quinta da Abrigada, in Alenquer, on sale for 3.9 million euros. Always in the millions of euros, properties of this type are often put on sale by the real estate agencies, which take from one to two years to sell them, says Carlos Penalva. Active in the Portuguese market, the German company Engel & Völkers recommends this 18th-century manor to “foreign investors who enjoy living in a more rural environment,” the advertisement states. With 30 rooms, most of the mansion located on this 132,000 square-meter property was rebuilt after an earthquake in 1755.

Standard & Poor’s expects a further escalation of housing prices in Portugal. According to the rating agency, real estate prices are set to rise 8.1% this year. These estimates put Portugal, along with Ireland, at the top of the price acceleration expected this year, boosted by the growth of the national economy, low-interest rates, demand by foreigners and the limited supply of housing. Quintela and Penalva Real Estate’s director told ECO that “the real estate market has shown sustained growth, with solid indicators in the short and medium-term.” Last year, the agency received an average of 40 new clients per day, adding to its “strong” portfolio of domestic investors.

An 8,500-square-meter farm in Lisbon is typically Portuguese, dating back to the reign of Dom Sebastião, and is owned by the Lisbon City Council. It is being sold through Sotheby’s International Realty for seven million euros and belonged to several well-known families, among them D. Luís de Meneses, the Palha family and the Van Zeller family. It was acquired by the city council in the twentieth century.

In the acquisition of homes listed in the tens of millions of euros, payment methods often vary, Carlos Penalva explained. “Some pay up front, generally when there are no major constraints, such as required approvals for projects, licenses, etc.” Patrícia Barão, at JLL, explained that “a percentage is paid at the signing of the pre-contract and the rest when the deed is signed, and there may be reinforcements in the interim.” But regardless of the chosen method, in November of last year, it became mandatory to explicitly report all means of payment used to transact real estate, on purchases or leases of more than 2,500 euros. This new rule, published in the Diário da República newspaper in August, aims to help the authorities track the money involved in these transactions, thus avoiding illegal deals.

In the magical village of Sintra, Fine & Country has a 13-room manor on sale for 15 million euros. Located in the Quinta de S. Tiago, near the Palace of Monserrate and the Palace of Seteais, the mansion was built in the 16th century as a monastery. It underwent some changes in the 1960s but retains all of its original features. The ten-hectare farm remained in the hands of the same family for 70 years and was named a UNESCO World Heritage Site.

According to Quintela and Penalva, “there has been a trend in turning properties like these into luxury housing condominiums or hotels.” Luximo Christie’s Sofia Costa also said that “there are also private individuals with deep pockets who invest to convert the property for tourism purposes or to fulfil the dream of having an iconic house that is full of charm.” A brief search leads to a large number of buildings and developments that are being transformed into luxury housing.

Another example of this is a property on sale by JLL, which has the most expensive property of this selection. This manor, once a sixteenth-century monastery, has an aqueduct and several gardens, covering a total area of 19 hectares. “It has the approvals for the construction of an 80-room hotel, an aparthotel with 20 rooms, a golf course, a club and 150 family homes,” the real estate agency states in its advertisement. All this for 19 million euros.

Regardless of the price, there is usually someone who shows interest, even if it takes between “six months to a year” to sell a property of this type, Patrícia Barão said. Regarding the future of the real estate market, the consultant estimates that “2018 will be an equally dynamic year, where there will be a greater consolidation between supply and demand and a less pronounced increase in price levels.” This view is shared by Luximo Christie’s, which stressed that “projections point to a continuous appreciation of real estate in Portugal in the medium and long-term. The investment in real estate by domestic investors continues to be sustained by the perception that real estate is a safe alternative to traditional financial products.”

Original Story: Economia Online

Translation: Richard Turner