International buyers have "dynamised" the real estate market in Lisbon, according to Engel & Völkers.
"The real estate market in Lisbon is increasingly popular. The city has become one of the main destinations of choice for many digital nomads since the pandemic. They are mainly attracted by the mild climate that lasts all year, the moderate cost of living, the convenient connections with other European destinations, and the good offer of coworking spaces in the city. Most digital nomads live here between six months and a year and tend to opt for small apartments in the city centre", reveals Vanessa Moreira, Managing Partner from Engel & Völkers Lisbon.
At the end of October, the Portuguese Government implemented the “digital nomad visa”, which will give individuals working remotely outside the European Union the opportunity to live and work in the country for a period of 12 months. To obtain this visa, the salary must be at least four times the Portuguese minimum wage, translating to around €2,800 per month.
High demand for Lisbon
Many companies are currently being attracted by Lisbon's status as a tech hub and, as a result, the city has become a hub for start-ups. This is also due, in addition to the local talent available, to the fact that the real estate market is still moderately priced compared to other countries.
Although the Portuguese are the strongest group of buyers in Lisbon, representing around 75 percent, the number of international buyers is steadily increasing, translating into a 25 percent investment made by international buyers in Lisbon.
According to Engel & Völkers, in the luxury real estate market, more specifically in properties located in Lisbon and valued at more than one million euros, the main interested parties are of Brazilian nationality. This is followed by buyers from North America, Germany, the UK, and France. The areas of Alcântara, Parque das Nações, Penha de França, and São Vicente are the most sought-after among investors.
The Parish of Santo António is one of the most exclusive areas in Lisbon. It is known for its historical monuments, its traditional shops, and its trendy cafes and bars. The maximum prices for apartments in the 1st quarter of 2022 reached 12,500 euros per square meter, while prices for Townhouses reached 3.36 million euros.
The Estrela neighborhood is very popular among the Portuguese, where numerous museums and other tourist attractions are located, such as the Basilica da Estrela, an old convent of Carmelite nuns belonging to the 18th century, and Jardim da Estrela, one of the most beautiful green spaces in Portugal. Maximum apartment prices were €10,800 per square meter in Q1 2022. House prices in this part of the city peaked at €3.4 million. The neighbourhood is particularly popular with families, who are attracted by the security it offers, as well as the diversity of the natural surroundings and seaside settings.
Avenidas Novas is a residential parish located in the centre of the city. The houses in this neighbourhood are particularly sought after by elements of Lisbon's upper middle class. Foreign investors are attracted by the numerous cafes, shopping centres, and excellent infrastructure. In the 1st quarter of 2022, the highest prices charged, per square meter, in apartments for own housing were around 10,000 euros. The prices of townhouses and semi-detached dwellings reached 2.75 million euros during that period. For properties with differentiating characteristics, prices of up to ten million euros were charged in this parish.
Real estate outlook
Engel & Völkers state that although the real estate market is currently being impacted by the events that the world is going through, the last few months have shown that interest in residential real estate in Lisbon remains high. In defiance of rising inflation and a slight rise in prices, demand for real estate continues to grow.
"Real estate continues to prove to be a safe investment. The rise in interest rates has so far not had a significant impact on the number of residential real estate transactions. Potential buyers are still willing to pay the current market price, especially in prime locations. That said, we predict that demand will continue to be strong in the long term and that prices will stabilise at a high level in 2023", says Vanessa Moreira.
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