Property Investments In Portugal
Portugal is one of the best countries in the world to buy, and own real estate.
The largest investments in real estate are directed to the tourism industry or long-term renting, whether for housing, either in too much sought commercial sector.
The real estate market in Portugal is highly developed, with a high quality of supply in all sectors and a considerable presence of foreign occupiers.
The market is highly transparent, to point out that the laws governing lease agreements, are now more liberal, making it easier to remove a tenant who does not pay the rent.
Housing prices in Portugal are rising quite strong, along with a recovering economy.
According to data released by the Statistical Service of Portugal (INE), property prices in Portugal rose by about 3.5% (2.7% in real terms) in the first half of 2016 compared to the same period last year, thereby getting an average price of € 1,047 per square meter (sqm).
After several years of depression, housing prices in Portugal started to recover in 2014.
Portugal’s property market is booming once more! Sales have increased hugely this year and we’ve seen a significant shift in buyer profile as increasing numbers of investors realize the potential of the Portuguese real estate sector.
There are no restrictions on foreign property ownership in Portugal and transaction costs are generally low.
Apartments rental yields in Portugal are from moderate to good, ranging from 3.6% to 6.2%
Gross rental yields in Lisbon – the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs – are moderately attractive.
Gross rental yields are an important consideration even for those who do not intend to become landlords, because a high rental yield indicates that the property market is reasonably priced.
Lisbon’s property market is now reasonably priced, though hardly a bargain.
A typical 120 sqm apartment, in an elite area in Lisbon rents for around EUR 2,000 per sq. m., and costs EUR 235,000 to buy. Apartment yields in Lisbon range from 5.4% to 6.2%, with no really clear difference between sizes.
These are reasonable yields and the purchase price is attractive for a European capital city, though the city is hardly at the centre of things. Villas in Lisbon have similar gross rental yields.
In Algarve, a 120 sqm apartment costs on average EUR 1,600 per sqm, or EUR 150,000.
Algarve apartments return rental yields which range from 3.6% to 4.6%.
These rental yields figures assume long-term lets; short-term rentals may earn higher returns.Smaller apartments tend to be most profitable. Villas in Algarve appear to earn similar returns.