©Reuters. Foreign investment in housing breaks records in Lisbon
Lisbon, Apr 16 (.).- The pandemic has not put a stop to the real estate boom that Lisbon has been experiencing for years nor has it diluted the appetite of international investors, quite the opposite: the purchase of housing by foreigners made 2021 a record year in the Portuguese capital.
The beginning of 2021, with a harsh confinement that did not begin to be lifted until the end of March, presaged the worst for the second year of the pandemic, but the real estate market was able to recover and even exceed all expectations.
Throughout the year, foreigners bought 1,767 residential properties in the so-called Urban Rehabilitation Area of Lisbon, which covers practically the entire territory of the city, with a total investment of 923.1 million euros, according to a report that has just been published the specialized Confidential Real Estate portal.
The figure is a record, and not for little difference: it is 20% higher than the year that had the best numbers so far, 2019.
“Portugal has become a market of refuge for investors,” the director of Confidencial Inmobiliario, Ricardo Guimarães, explains to EFE, noting that attractions such as security and climate, added to the country’s good vaccination figures, managed to offset the logistical and mobility difficulties.
On average, foreigners spent 523,000 euros per property, another record figure and well above the 353,700 euros spent by a Portuguese for a house in Lisbon.
By nationality, Americans led the list with 15% of total investment, followed by the French (14%), Chinese (13%), British (10%) and Brazilians (7%).
The countries of origin of the capital, Guimarães refers, have been changing in recent years because Lisbon “is already a very consolidated market as an investment destination but also to live in”.
Chinese investors, who topped the podium for years, have been losing weight.
GOLDEN VISA, THE UNKNOWN
This foreign investment record coincided with the prelude to the changes in the Portuguese Golden Visa (NYSE:) regime, which as of this year greatly restricts the possibilities of obtaining a visa with real estate purchases in areas such as Lisbon, Porto or the Algarve.
It is no longer enough to acquire any property of more than 500,000 euros in Lisbon, but it is possible to obtain a residence permit with the purchase of commercial assets such as shops, offices or tourist apartments, or invest in housing, but through a fund capital.
From the sector they point out that “it is not easy” to assess to what extent these changes in the Golden Visa have led investors to rush the end of 2021 to buy and leave record figures in Lisbon.
“The Golden Visas were very important in launching Lisbon as a destination”, acknowledges the director of Confidencial Inmobiliario, who nevertheless recalls that many of the large markets of origin of residential investment do not have a “strict relationship” with these residence permits .
The great exception would be Chinese investors, the great beneficiaries of the Golden Visa, who “have been losing share in Lisbon.”
At the national level, the first data point to a drop in real estate investment through Golden Visa since the rules changed: in the first quarter it fell 12.5% compared to the same period in 2021, according to the Foreigners and Borders Service (SEF).
Foreign investment is one of the factors that has contributed to the rise in housing prices in Portugal, according to a study by the Portuguese foundation Francisco Manuel dos Santos, which warns of “possible excessive growth from the fourth quarter of 2017”.
In the last five years, the price of housing has registered increases that range between 8.8% in 2020 and 10.3% in 2018. In 2021, the increase was 9.4%, according to the National Institute of Statistics.
The same organization points out that the value of homes subject to sale grew by 65.5% in half a decade.
Foreign investors represent around 10% of residential property purchases in Portugal.