Homes. Foreigners live it up in Portugal

The French followed close by by the Brazilians, are the foreigners that invest the most in the national house buying market. The trend is staying.

The weight of the sales of homes to foreigners in the total real estate sold in 2017: French market stays on top of the foreigners that invest the most; the weight of the Brazilian market has been growing in the last few years; the weight of the English market in the transactions made last year.  Foreigners continue to deal cards in regard to the purchase of homes in Portugal.   This trend is staying and, it seems, should continue to grow in the next years. According to the last data from the Association of Professionals and Companies of Real Estate Agents of Portugal (APEMIP), foreign investment to purchase housing in Portugal had a representativeness of 20% last year. Doing the math, a fifth of the dwellings acquired in 2017 were done so by people who didn’t reside in the country.

The French market stays on top of the foreign investment in the country (29%), but it’s Brazilian investment that has grown the most, already representing 19% of the houses bought by foreigners in Portugal. In the top 5 are the English (11%), the Chinese (9%) and the Angolans (7,5%).

For APEMIP president, Luís Lima, the ascension of the Brazilians isn’t a surprise. “For about three years I’ve been calling to attention the potential the Brazilian investor represents for the national real estate, that has not only been accentuated by the political, social and economic instability that Brazil is going through, but also with the election of Donald Trump in the United States of America, that has made many Brazilians that had previously invested in Florida look for safer alternatives, like the Portuguese real estate”, also revealing that this representativeness can continue to grow during 2018.

The Brazilians already dominate the purchase of houses by foreigners in Lisbon and Porto (with a representativeness of 24% and 27%, respectively); however, in Algarve and at the national level it is the French that occupy the top places.

For president of the APEMIP, the challenge lies in stopping the break in Chinese investment. He says, “The Chinese still represent 9% of the total of sales to foreigners, but we can’t help but to note this investment’s break on the national scope. It’s necessary that the procedures for the investment authorization program for investment activities be quickly normalized to avoid possible negative impacts and distrust that delays (in issuing and renewing visas) found today could have on these citizens.”

Real estate with the highest demand

T2 and T3 are the typologies most desired by foreigners. Lisbon, Porto, and Algarve continue to be the most searched for regions by international investors looking to bet on the Portuguese housing segment.

However, for Luís Lima, in 2018, this demand should spread to other regions of the country. “More and more there are investors interested in betting on the purchase of homes outside habitual routes, either because they have family ties to certain regions of the country, or because they’re looking for investment alternatives through the bet in rural tourism, for example”, the chairman explains. For that reason, he considers the prospects to be encouraging and, as such, will bring to these regions new economic dynamics that’ll promote their development.

X-Ray

Foreign clients represent around 19% of the total of transactions by Century 21 Portugal made last year, surpassing the two thousand operations, with clients predominately from countries such as France, Brazil, China, Belgium and the United Kingdom. Last year, more than 50% of international transactions were dominated by the French, and around 16% were made by the Brazilians and 13,2% by the Chinese. 

The most wanted areas were Lisbon, Cascais, Porto, Algarve, and Costa de Prata, but the real estate agency admits that there are other places that have started to arouse an increasingly bigger interest. And gives examples like Setúbal and Alentejo.

“Portugal achieved a quite strong position of international attractiveness, which allows us to expect a consistent demand from several countries in 2018, even though the international segment now presents a new client profile mainly characterized by a real estate demand until 300 thousand euros that is open to analyzing real acquisitions options in different areas of the country”, reveals Ricardo Sousa, real estate CEO.

At Remax however, the weight of the external market has gone down slightly, going from 13,9% to 13,1% of the total volume of transactions – Portuguese clients represent 87% of the real estate agency’s transactions and 83% of the billing. But it was the Brazilians that purchased the most houses in this network, overthrowing the French (leading in 2016) and the Chinese (leading in 2015). 

Luxury attracts

The market meant for the high-end segment also attracts foreign buyers. Private Luxury, which focuses in real estate above a million euros – with special attention to palaces, buildings and homes (primarily luxury condominiums, like Quinta da Marinha, Quinta Patino, Herdade da Aroeira or Quinta do Lago), penthouses, apartments and rural properties above 500 hectares –, revealed that over 75% of their clients are foreigners, 30% of which are Brazilian and 20% French or Swiss.

But the real estate agency also reveals that there are other nationalities represented: Americans, Middle Eastern, Swedes, British, Danish, Spanish, Latin-Americans, Italians and Angolans as well.

Also at Remax Collection – real estate agency focused solely in the luxury segment – foreigners weigh 49%, led by the French and Brazilian, but the nationality list doesn’t end here. “The Asians rise again, not as much as the Chinese, because they’ve yet to rid themselves of the golden visas controversy, but other nationalities as well, like the Vietnamese, for example. Other investors that buy more and more in Portugal are the Turkish, due to the instability felt in their country, and even the Russian, British and the Angolans. Portugal is highly rated outsider and continues to be one of the cheapest countries”, concludes.