Getting to know Portugal

Located at the meeting point between three continents – Europe, Africa and America – Portugal has long been central to important international routes, and so has a long history of foreigners arriving to settle there. In fact, back in the 17th Century, Lisbon was one of the most popular destinations in Europe.

However, in more recent times it has only really been in the last 30 or so years that Portugal has firmly re-established itself as a popular expat destination.

During the mid-1960s there was a significant surge in immigrants from the country’s former mainly African colonies arriving to live in the country. Yet it was Portugal’s accession to the European Union in 1986 that really made it an attractive proposition for European and other non-colonial expats.

By the early noughties, Portugal had established itself as one of the most popular locations in Europe for expats, holidaymakers and overseas property buyers alike.

Then came the financial crash of the late noughties and, suddenly, everything changed.

Like many areas of Southern Europe, Portugal struggled to recover economically from the global financial meltdown and the country’s property market and, indeed, its economy, collapsed. By early 2014, property prices in Portugal were 30 to 40 per cent lower than they had been at the market peak of 2007.

Yet, slowly but surely, Portugal is recovering from those dark days and overseas interest is steadily returning to the country’s property market. Property prices throughout the country are rising once again, and investors are returning in droves to the country. Of course, whether this resurgence will be impacted by the Brexit vote, and a likely decline in interest from British buyers remain to be seen.

Unlike many other European countries, Portugal stopped building during the financial crisis, and although their property market suffered, there has been a dramatic improvement post-recession, with property prices picking up in a number of popular areas over the past few years.

According to figures compiled by the country’s National Statistics Institute (INE) in March 2017, the average price of a Portuguese property rose 7.1 per cent year-on-year in the fourth quarter of 2016.

What’s more, throughout 2016, property sales in Portugal increased firmly across all areas of the country, most notably in Lisbon, Porto and the Algarve. And demand from buyers – both from Portugal and overseas – is expected to increase.

One of the key drivers of this boost to the Portuguese property market has been the introduction of a Golden Visa scheme. This scheme offers residency to non EU-based property purchasers investing in high-end properties. The Golden Visa offers a residency permit for a family, including dependent children, in return for a Portugal property investment of €500,000 or more. The Golden Visa is renewable every two years as long as the visa holder spends two weeks in the country every two years. This popular scheme has helped attract increased levels of investment from overseas buyers, and estate agencies reported sizable increases in sales since the scheme began in 2012. The Golden Visas scheme could become particularly relevant to British purchasers in the years to come, once the UK leave the European Union.