Not surprisingly, Portugal is one of the most chosen countries for the expatriation of both French and English speakers. You can find on our website on the Expat Insider 2017 article the good ranking of Portugal in certain sections such as quality of life, welcome or security. While waiting for the Expat Insider 2018 results, the Franco-Portuguese Chamber of Commerce and Industry of Lisbon and local associations give us figures for 2017 – 2018, on expatriation in Lisbon or elsewhere in the country, the nature of their investments and their impact on the real estate market in Lisbon or Portugal.
How many expats are there in Portugal?
In 2017, the Aliens and Frontiers Department issued 29,000 additional residence permits to European Union nationals, which represents a 33% increase since 2015. A strong increase that reached its highest peak with a +19% increase in expatriates in Portugal between 2016 and 2017. The inhabitants of the European Union are not the only ones who are attracted by settling in Portugal since the country has regularized nearly 150,000 migrants since 2012 and thus over the last 6 years: the country has thus offered them the opportunity to enter the Schengen area.
Here is a list of applications for residence permits in Portugal over the years. A strong trend that is unlikely to abate as Portugal is increasingly in the spotlight :
- 2012: 28681 residence permits
- 2013: 22600 residence permits
- 2014 and 2015: about 21,000 residence permits
- 2016 : 23590 residence permit
- 2017: 29055 residence permits
Expats and the Portuguese real estate market
For two years now, French expatriates in Portugal have stolen first place from the British and Chinese in terms of real estate investments. They are indeed the biggest investors in the country since out of the totality of Portuguese real estate purchased by foreigners, 30% were purchased by French people in 2017. Figures given by the association of Portuguese real estate professionals Apemip, which obviously pose problems of soaring property prices in Lisbon or the Algarve, the preferred places for investment in stone. This windfall of French investors is also helped by the tax exemption of the NHR, which allows them to acquire more expensive properties and to boost property market prices in Portugal. For this reason, the status of Non Habitual Resident in Portugal could soon change! You will find here a complementary article in Les Echos about the explosion of Portuguese property prices.
A trend that is not likely to abate without government regulation, given the constant rise in the number of French-speaking expatriates in Portugal: there were indeed a few thousand in 2013 but are now more than 50,000 according to the Franco-Portuguese Chamber of Commerce and Industry (CCI). It is worth noting that 80% of them are retired people, who thanks to an advantageous Portuguese tax system, can still afford to make real estate investments to live in Portugal or to develop a seasonal rental business.
However, some Lisbon estate agencies qualify these figures by stating that Portugal did not experience a speculative real estate bubble like France in the 2000s and that a quarter of the real estate purchased in the country is bought by French people. The overall situation has therefore been helped by the status of Portuguese Non-Usual Resident, but the price increase observed is still reasonable.
Real estate investments of European expatriates in Portugal
Foreign buyers are of course attracted by security or quality of life. In Essencial Portugal you will find an article on the reasons for moving to Portugal. But these are not the only reasons, since the fiscal measures voted in 2013 by the Portuguese government lead to a global taxation system that is convincing:
- Exemption from taxes for 10 years for private pensions or income from certain specific professions.
- No wealth tax (ISF)
- No inheritance tax
- No tax on donations to direct heirs
- Etc…
A number of tax measures that greatly favour the purchasing power and real estate investments of expatriates in Portugal such as the English. They invest on average between 200000€ and 250000€ for their real estate purchase in Lisbon, Algarve or elsewhere for a house of about 100 to 150 square meters. The price depends of course on the chosen locations but these houses can be located on the seaside in addition to their attractive price.
In 2018, however, it becomes more and more complicated to find the right buying opportunities in Portugal in the capital or in the Algarve, which are the most popular destinations for expatriates in Portugal :
- Online ads not available
- Exclusivity of properties owned by certain real estate agencies
- New constructions well above market price
- Increase in demand relative to supply
- Exorbitant prices of French / English-speaking real estate intermediaries
- Differences in building standards in Portugal, such as for insulation for example
Lisbon’s soaring property market prices
The property market in Portugal went through a dark period before 2008 but has since recovered well. We note that 152,000 properties were sold in Portugal in 2017, 27,000 more than in 2016: an increase of 18%. But this is not the only sign of recovery in the Portuguese real estate market since, according to the Portuguese Association of Builders and Developers, the country has recorded a 35% increase in applications for building permits for new properties or renovations. The speed of sales of properties put on the market is also a positive point since according to the Apemip (Association of Portuguese Real Estate Professionals), properties sell in 6 months on average.
There are, however, great disparities in the country, since it is no longer a rise but a surge in prices that can be observed on the Lisbon property market. Between old apartments, new apartments or apartments renovated as new, the average price of a property in Lisbon can be situated at 4000€ per square meter. This is only an average and it all depends on the area in which you want to live since for the most prestigious ones like Chiado or around the Liberty Avenue, prices are already more than 10000€ per square meter.
We are already far from the great opportunities that could be seen in 2016 and many expats in Lisbon are now concentrating on the outskirts of the capital where prices per square meter are divided by 3: between 2500€ and 3500€ per square meter.
Property search in Lisbon
If you too wish to carry out a real estate search in Lisbon to settle here or as a rental investment, it is easier to direct you to independent property hunters who will keep your interest as their main objective. Contact me and I will put you in touch with a trustworthy English speaking person, who will discuss with you your search criteria and browse through all the real estate agencies in Lisbon to make a selection that suits you perfectly:
- Selection of properties in Lisbon and surroundings
- Accompaniment in the real estate agencies or directly with the owners
- Assistance in negotiating the best prices
- Assistance in closing the sale and obtaining all official documents
