The Portuguese property market is experiencing remarkable growth and stability, making it an ideal time for investors to consider entering the market. Here are several compelling reasons why choosing to invest in Portugal now could be a wise decision:

Strong market performance

Recent data from leading Portuguese property analyst Confidencial Imobiliário indicates a robust performance in the housing market. In the second quarter of 2024 alone, 33,350 dwellings were sold in mainland Portugal, marking a 4.9% increase over the previous quarter. This uptick in transactional activity highlights the growing demand and confidence in the market.

Economic growth

The Royal Institute of Chartered Surveyors (RICS) has also noted positive economic indicators that are likely to bolster the housing market further. Senior Economist Tarrant Parsons points to strong economic growth forecasts, rising disposable incomes, and improving consumer and business confidence as key factors that will drive the market in the coming months.

Increasing property prices

House prices in Portugal are gaining momentum due to restricted supply. The 2024 Portuguese Housing Market Survey by Confidencial Imobiliário suggests that this trend is set to continue, providing investors with the potential for significant capital appreciation.

Attractive resort properties

Resort properties in Portugal, particularly in the Algarve, especially appeal to investors. These properties offer a combination of economic returns from price growth and rental yields, along with lifestyle benefits such as stunning beaches and world-class golf courses. The latest Portuguese Resorts Market Report shows that resort house prices rose by 9.8% in 2023.

Investment opportunities

For investors in Portugal, there are a number of locations that offer appealing investment returns.

The Algarve

Of course, the Algarve is a top choice due to its popularity as a holiday destination and for long-term renters. If you’re stuck for location, Albufeira, Portimão and Faro are all by the coast and close to some of the region’s top beaches.

However, it’s worth checking current restrictions on short-term lets as some cities, particularly in the Algarve, have strict regulations regarding short-term lets as the government is concerned that their high price points are pricing out locals from the property market.

The rising demand from tenants presents a great chance for higher returns and minimises the risk of prolonged vacancies. Additionally, with low development rates, there is potential for significant capital appreciation due to the stable demand and market liquidity.

Porto and Lisbon

Porto and Lisbon are fast becoming a hub for global start-ups and technology entrepreneurs (PropertyGuides, 2024). Both cities are on the coast, easy to get to from Europe and the USA and are popular destinations for young digital nomads and tourists seeking a fun-filled weekend away in a city of culture.

The increasing rental prices in Lisbon and Porto are part of a larger European trend, where urban living is becoming more popular in major cities. The strong demand and limited supply of rental properties in Portugal indicate a vibrant and promising market for investors.

Currency Zone

For guidance on managing your exposure to the ever-changing currency markets, head to our Currency Zone. We partner with Smart Currency Exchange, an FCA-authorised currency specialist. Choosing to work with a currency specialist rather than your high-street bank will enable you to benefit from their competitive exchange rates and specialist currency knowledge. For more information, head to our Currency Zone.

Written by PropertyGuides for Rightmove