(Translated by Google)
Portugal has entered the radar of foreign real estate investors and, although interest appears to be slowing down – data from the National Statistics Institute (INE) shows that the drop in house transactions was more significant on the part of foreign buyers than national ones –, the country remains in the spotlight. In Brazil and the USA, the “appetite” for Portugal remains strong, real estate mediation experts from both countries tell idealista/news, anticipating more real estate deals in the near future.
The most recent data from INE indicate that fewer houses are being sold in Portugal, with the number of transactions falling 4.1% in the first quarter of the year compared to the same period last year and 3.1% compared to the last three months of last year . They also show that the drop in transactions was more significant on the part of foreign buyers , this scenario coinciding with the end of the regime for Non-Habitual Residents (RNH), under the old terms, and the end of golden visas for real estate investment:
- Buyers residing in the national territory purchased 31,010 homes in the first quarter of 2024, 3.1% less year-on-year and 1.6% less compared to the previous quarter. It is the lowest number since the second quarter of 2020, when the Covid-19 pandemic was declared;
- Buyers residing in the European Union (EU) purchased 989 homes in the first three months of 2024, a number 22.1% lower than that observed a year earlier and 19.8% lower than at the end of 2023;
- Buyers residing in countries outside the EU purchased 1,078 homes in the first quarter of 2024, 11.9% less year-on-year and 22.4% less compared to the previous quarter.
Still, despite this data and the legislative instability that exists in Portugal – one of the obstacles highlighted by several players in the real estate sector with a view to the arrival of new investors – the country remains on the radar, with optimism being the watchword. João Teodoro , president of the Federal Council of Real Estate Brokers (COFECI)-Regional Council of Real Estate Brokers (CRECI) of Brazil, and Anthony Domathoti , president of the North American mediator EXIT Realty Premium, confirm this to idealista/news.
Anthony Domathoti, president of North American mediator EXIT Realty Premium idealista/news
“There is great interest from US investors”
“There is great interest on the part of US investors in Portugal. 2023 was a bit 'calm', however, in 2024, in the first and second quarters, there was great growth. And I predict the third and fourth quarters of the year will be excellent. And 2025 will be even more magnificent”, estimates Anthony Domathoti, highlighting that “2025 and 2026 will be crucial years for Portugal” and that investors , particularly North Americans, “are no longer investing as much” in countries like Spain and Italy.
According to the person responsible, who was speaking to idealista/news on the sidelines of the second edition of the APEMIP Imocionate 2024 Convention – held on July 5, 2024, in Lisbon –, North American investors are winking at various segments of the real estate, particularly luxury residential , retail and hospitality.
“Real Estate Investment Trusts ( REITs ) are buying assets across all market segments, it is only a matter of time before hospitality becomes key. I'm talking about a potential type of investors related, for example, to Local Accommodation (AL). In Lisbon [new registrations] are prohibited, but outside the capital is where the focus is now. They are looking at this type of business, asking questions”, reveals Anthony Domathoti.
When asked about why Portugal is attractive, the expert praises, for example, the country's post-pandemic recovery. And he considers that property purchase prices are lower than in other geographies. “US investors are looking at return on investment and view this issue in a very practical way. [Afterwards] Portugal is a very peaceful country, it is economically stable and has a very large presence”, he says, anticipating that large groups and/or funds such as KKR , Blackstone and Cerberus will invest heavily in the country soon.
João Teodoro, president of the Federal Council of Real Estate Brokers (COFECI)-Regional Council of Real Estate Brokers (CRECI) of Brazil. idealista/news
Brazilians will “continue investing in Portugal”
An optimistic scenario, moreover, which is also well known among Brazilian investors . João Teodoro, president of the Federal Council of Real Estate Brokers (COFECI)-Regional Council of Real Estate Brokers (CRECI) of Brazil, recalls that “Portugal has always aroused great interest in Brazil because” of the roots that exist between the two nations, with there are still many people who maintain family ties.
“Portugal has approximately 10 million people, in Brazil we have 216 million. If we stratify the numbers, say, to 2% or 3%, we will have around 5 million people with very high purchasing power . And these people really like Portugal for several reasons. Lisbon, above all, is very attractive compared to other European cities. There is security, something that today, unfortunately, we lack in Brazil. In fact, throughout Latin America. And that attracts a lot of people. Language is also another very relevant factor,” he explains.
Reiterating that “there is no great decrease in interest on the part of Brazilian investors” in Portugal, João Teodoro prefers to put his finger on another wound, “the problem of the deficit in construction ”, which means that supply has fallen a lot, leading to a potential price increase. And he says he has no doubts about one thing: “We [Brazilian investors] will continue to invest in Portugal”.
The person responsible also adds that there is a type of Brazilian-type investor, in the case of the residential segment. People who buy a second or third home in the country from a business profitability perspective, that is, to rent it out. “There are a lot of people who make this type of investment, but this is actually more a question of opportunity. The person has invested and doesn't want to leave the property completely idle, so they do a 'mix': rent it out and set aside some time to enjoy it themselves.”
João Teodoro, who participated with Anthony Domathoti and Patrícia Barão, Head of Residential at the consultancy JLL, in a debate at the APEMIP Imocionate 2024 Convention, also adds that the bilateral relationship between Portugal and Brazil is in good health, with there also being “many Portuguese investing in real estate in Brazil ”.
