Lisbon luxury property values are rising strongly, driven by overseas property investors often interested in Portugal’s ‘golden visa’ residency program.
The average value of Lisbon luxury property rose by nearly seven per cent in 2018, according to the latest report from global brokerage Knight Frank.
Many of the overseas property investors are attracted by Portugal’s successful ‘golden visa’ program, which offers residency and valuable tax incentives to foreigners who invest in the country, including pricey real estate.
As of March this year, the government said it had issued nearly 7,300 permits to overseas investors since the program began in 2012, according to Knight Frank.
While some golden visa recipients have chosen to start businesses or transfer capital, the sweeping majority gained residency by purchasing real estate for €500,000 or more, according to Knight Frank, citing official immigration stats.
In exchange for buying a luxury home, foreigners receive pension and rental income, non-Portuguese income and capital gains on real estate tax free.
Chinese investors have been the biggest cohort to take advantage of Portugal’s golden visa, accounting for a little over half of all residency permits through the program. They were followed by Brazilian, Turkish and South African nationals.
The Lisbon luxury property market has particularly benefitted from the influx of foreign wealth to Portugal, in addition to a strengthening domestic demand.
Favourite areas in the Lisbon luxury property market include the old town of Avenida de Liberdade, a historic quarter with an average price per square metre of €10,800.
Other areas commanding similar prices are Chiado, which saw real estate prices soar following a massive fire in 1988, and the trendy area of Principle Real.
PricewaterhouseCooper’s recent ranked Lisbon as the best place to invest in Europe in 2019, and with the Lisbon luxury property market outstripping price appreciation in nearly every major luxury hub in Europe in the fourth quarter of last year, British overseas property investors should take note.