Investment property Portugal – Guide to buying property in Portugal

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Portugal – Investment Guide

Fellow EU members generally regard property investment in Portugal as a safe and solid bet. With a well-established, stable economic climate, Portugal’s continued popularity as a retirement and holiday destination guarantees market buoyancy for property sales and rentals and offers potentially high long-term profits for today’s shrewd investors.

Algarve may as well be Portugal’s other name but although it still dominates the Portuguese property scene – 90% of all foreign purchasers still buy here – it’s now giving way to exciting emerging property markets, such as the Silver and Green Coasts, stretching north from Lisbon and onwards to Porto.Road links to these areas are now fast and efficient, while budget flights to the international airports at Lisbon and Porto all provide access within around half an hour.

For now, property prices are still a good deal lower in these Portuguese emerging markets.Slightly more adventurous holiday homebuyers and tourists are escaping the southern crowds to experience a more unadulterated Portugal, with its many authentic towns and villages bordering a stunning, rugged coastline.

Why Portugal?

Buy More for Less!

Portugal’s cost of living and per capita income have indeed been creeping up since EU membership in 1986 and European monetary union in 2002, but property prices are still lower than in many other locations such as the UK.Also, the cost of maintaining and managing them is also comparatively low. This factor is of course often a major consideration for retirees and other homebuyers looking for an affordable destination in which to live or purchase a holiday home.

Tourism – a Winning Formula

Helped along by 300 days per year of cloudless skies and stunning natural features, Portugal really does have something for everyone; purpose-built, luxury golf developments, sandy beaches, dramatic cliffs, bustling tourist resorts, quiet, rural getaways, classy cities, a multitude of World Heritage sites, water sports activities, and mountain trekking… to name but a few. This variety is echoed by the vast range of property options and prices available to suit all tourist and investor needs. Apartments, holiday villas and townhouses in carefully chosen locations are all potentially excellent buy-to-let investments.

In 2006, 12.8 international tourists visited Portugal and the government is keen to further promote the country’s tourism through incentive schemes to welcome investors and boost its economy. EU grants are also ensuring Portugal’s rural economy also receives its fair share of new roads and other facilities which are improving access to the more rural emerging property areas of Portugal.

Watch Your Money Grow

Despite growth having slowed in Portugal’s hotspot locations in recent years, investors still favour Portugal as a stable medium to long-term investment opportunity, ideal for the retirement market.Today capital growth and rental yields stand at an average of 10% per annum. Many people are buying up holiday homes with a view to enjoying them during part of the year and renting them out for the rest.Their longer term vision is often to use them as retirement homes or cash in on healthy capital returns.

In Portugal’s emerging markets, property prices are up to 30% lower than in more established markets and many investors are expected to enjoy stronger growth figures in such areas in the short to medium term.

Well-trodden Path

With some 50,000 British property owners alone living permanently on the Algarve, Portugal offers a well-trodden property market and a straightforward, transparent buying procedure to reassure its foreign purchasers.

The large number of foreign English speaking investors in Portugal means that English is widely spoken by legal, financial and real estate professionals, and translations are normally readily available.

Safe to Walk the Streets

Portugal has one of the lowest crime rates in Europe, along with a very stable political climate. This factor further entices property purchasers, particularly retirees, who all seek a safe and secure place in which to live or own property.

Green and Glorious

Construction density limits in the Algarve are set at a conservative 8%.In fact, Portugal boasts the largest area covered by golf courses in the whole of southern Europe. This means property developments are beautifully located but don’t spoil their natural environment, nor do they saturate the local market, keeping demand levels high and property prices on the move.

So Near Yet so Far

Portugal is so near in terms of distance, yet so far in terms of lifestyle.With budget airlines connecting Portugal to the UK in a mere 2 ½ hours, holidaymakers and homeowners are enticed by easy access and a complete change of daily routine. Portugal’s huge popularity as a tourist and property destination has brought the arrival of charter flights from all over Europe, including services from giants such as BA, EasyJet, Ryanair and TAP Air Portugal.

With the EU has come an improved standard of road transport throughout Portugal, making it fast and easy to access most destinations.

See also our property buyers' guide for Portugal.