In 2023, the Portuguese government promised that, with the “end” of the Portugal Golden Visa, all would see a drastic improvement to the Portugal housing crisis and a surge in property opportunities, whether to purchase or rent. News stirred around the globe on this, and Portuguese locals hoped this promise would come to fruition in 2024.
On October 7th 2023, the much-awaited “Mais Habitação” bill was passed and set into law, bringing forth significant changes in the real estate and housing sector; most importantly placing a spotlight on the Portugal Golden Visa and the Non-Habitual Resident (NHR) programme.
The highly profitable and popular visa programme in Portugal has undergone numerous updates over the years, since its inception in 2012; although most people may think it has officially ended, this in fact, is not the case. The essential change to the Portugal Golden Visa programme has been in its investment options, real estate investments no longer qualify, nor do investment funds that are directed towards the real estate sector.
The Non-Habitual Resident (NHR), this programme has been terminated and replaced with a new tax incentive, catered to individuals who teach in higher education, conduct scientific research, or choose to work in startup companies.
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Portugal’s Non-Habitual Residence Programme: New 2024 Transitory Regime
These changes proposed by the Portuguese Government with the “Mais Habitação” bill were aimed at impeding further foreign investors coming into the country. The Portugal Golden Visa was one of Europe's most successful residency by investment initiatives, having contributed nearly 7 billion euros into the country´s economy.
Three months have passed since the proposed end of the Golden Visa and Portugal´s housing market prices continue at sky-high levels, making it gruelling for locals to buy or rent a home. Moreover, housing conditions in Portugal are not ideal when hunting for a new home, as many buildings are outdated, and in need of renovation works.
Portugal has over 700 thousand empty and vacant housing units affecting dense cities such as Lisbon and Porto. This phenomenon arises from many underlying aspects; such as: can be from lack of financial capital to maintain the property, legal issues, inheritance, aging population moving from their homes to retirement living facilities.
Furthermore, COVID-19 pandemic had a direct impact, causing delays in property building and renovation permissions from city halls, and a major push for new construction versus rehabilitation projects that can revitalise cities and bring further accommodation needs.
One of the reasons why the Portugal Golden Visa was an incredibly successful programme, allowing foreign investors to rehabilitate property of 30 years or more; providing vibrancy to old, abandoned neighbourhoods and in turn giving opportunities for newly renovated housing.
Among the many reasons the Portugal Golden Visa proved such an incredibly successful programme is that allowed foreign investors to rehabilitate properties with more than 30 years of age, bringing a much-needed vibrancy to old and abandoned neighbourhoods, and in turn, creating financial, investment opportunities.
Despite the recent changes to the programme and the country´s bureaucratic ways in the digital age, Portugal is still a major player in the real estate market, as foreign investors continue to look to the country for future investment opportunities. Year after year, more individuals are choosing Portugal as their homeplace, as the country continues offering safety, good healthcare and educational systems, splendid beaches, a great climate, and an excellent quality of life for added peace of mind.
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According to latest reports, housing prices in Portugal, especially in Lisbon have increased by 30% over the past five years. Property prices in Lisbon are more expensive than in Milan, Berlin and Madrid with a record €5,426 cost per square metre.
The capital city, remains a highly desired area to purchase property and rent. With a living and working population of over 2.9 million, finding a “home sweet home” with a reasonable price tag is increasingly more difficult for Portuguese nationals. From an investment standpoint, Lisbon is the best location as it offers a solid long-term return on investment. Best of all, it is also considered a safe investment exit strategy, should an investor in the future wish to sell the property, as it can easily be sold due to the high demand.
Table of each city mentioned in comparison to Lisbon (Bloomberg City Tracker)
City | Price (Euro per Square Metre) |
Athens | 2,598 |
Lisbon | 5,426 |
Madrid | 4,064 |
Milan | 5,345 |
Vienna | 7,638 |
London | 8,435 |
Berlin | 5,004 |
Paris | 10,544 |
Sources: idealista (Madrid), Idealista (Lisbon), Rightmove (London), Immobiliare (Milan),Immopreise (Vienna), Le Figaro (Paris), Spitogatos (Athens)
Property pricing can be significantly less in the Centre of Portugal, composed mostly of rural countryside areas. On average a home located in the Centre comes around to €286,000 (€143.00 per square foot), which also reveals an increase of by 6% in a year. The Institute Nacional de Estatistica (Statistics Portugal) shows the most elevated regions of the country to purchase a home are Lisbon, the Algarve, Madeira, and Porto, exposing a high number of transactions by foreign buyers (+61.3%) and national buyers (+91.6%).
If you are looking to purchase a property in the capital city or rural areas of Portugal as your permanent sanctuary or as a potential real estate investment, opportunities are available despite the rise of property prices. Portugal remains a hotspot for real estate and investment, and most importantly foreign interest in the country has not faded, as Prime Minister Antonio Costa states “taking Portugal off the market might not be so easy”.
For clients looking to invest in Portugal, your best bet would be the Portugal D2 Visa programme, a residency by investment opportunity that provides a pathway towards citizenship in the European Union. Request a callback today to learn more about the D2 Visa programme with our team of professionals.
