Real estate in Lisbon is more accessible to foreigners than to locals
Analysis of the market in Portugal showed that the demand for real estate in Lisbon by foreigners exceeds the activity of local residents. According to experts, this situation threatens to oust the Portuguese from the market.
The reason for the imbalance in the number of transactions between foreigners and locals is that the first is willing to pay for the objects twice as much as citizens of Portugal can afford. According to the statistics bureau, the cost per square meter of real estate purchased by non-residents, on average, was 4,280 euros. And the locals bought housing for 1860 euros per square meter.
The jump in demand from foreigners has led to higher prices in the Lisbon market, during the last quarter they rose by 11.4%. The rise in price had a negative impact on the purchasing power of residents of the capital, and they had to look for options in other cities.
Lisbon attracts buyers with its architecture and mild climate. However, large investors from different countries are interested in local real estate due to the flexible tax policies and incentives introduced by the government. In addition, the pandemic and the possibility of remote work allowed people from various countries to move to sunny Portugal, and many of them decided to buy property here. In turn, the authorities are fully supportive of such trends.
For example, a number of foreigners in the country have a fixed tax of 20% of their income. For pensions, there is a tax of 10%. In addition, in Portugal, there is no tax on income from cryptocurrency. Such attractive conditions contribute to the inflow of foreign citizens. According to official statistics, in 10 years the number of non-residents has increased by 40% and reached the mark of 555,299 people.
A record increase in demand for the purchase of real estate in the capital of Portugal by foreigners reduces the chances for locals. To improve the conditions for the purchase of housing for local residents, the Government has revised the terms of the program for obtaining a residence permit “Golden Visa”. Now foreign investors will not be able to buy property in Lisbon and Porto.
It should be noted that the rise in property prices in Portugal has not stopped since 2014. At the end of 2021, the cost here was 50% higher than in the previous five years. Despite this, real estate in the country is considered quite affordable compared to other EU countries. The cost of about half of the houses in Portugal does not exceed 50 thousand euros, but most of the real estate at such a price is in the interior regions of the country and the islands. In some areas of Portugal, the cost per square meter of housing does not exceed 200 euros, such rates are mostly characteristic of small towns.