Rarely has the Portuguese market offered such marvellous opportunities. While the Algarve remains highly sought-after, Lisbon and its surrounding area now has some sparkling jewels to offer.
What greater pleasure can there be than savouring a locally-brewed beer or a chilled vinho verde on the terrace of the A Brasileira café in Lisbon, with its cosmopolitan ambience, to the sounds of conversations in English, German, Spanish and French filling the air? In fact, this country of ten million people attracts almost as many tourists per year, including over a million from France, just behind the British and the Spanish. Better still, 25,000 French citizens actually live in Portugal – and not only because of the beaches and the year-round sunshine in the south of the country. The Portuguese property market was brought to a virtual standstill by the international economic crisis between 2008 and 2013. Its recovery – particularly that of the high-end sector – is in part the result of government measures designed to rekindle foreign investment, and by extension the whole square-metre production machine.
The reduced tax model for professionals
To start with, professionals receive a "golden visa" in exchange for any investment of over 500,000 euros in the country, non-Europeans are free to move around within the Schengen area and ultimately obtain Portuguese nationality. "This Plan B has driven up demand from wealthy clients in countries at risk, mainly China but also South Africa and Brazil. And we now have a sizeable clientèle coming in from the Middle East," says Charles Roberts, director of the Fine & Country Agency. And in a second measure, since January 2013, Europeans have been able to acquire the status of "non-habitual resident", granting them a tax exemption on their private retirement pensions and investment income (for ten years, on condition that they spend at least 183 non-consecutive days in Portugal per year). And in another important– though far less publicised – development, "high value added" professionals (designers, architects, lawyers, etc.) will see their own tax burden limited to 20%. As a result, a small but gifted coterie has settled in the country, including the designer Philippe Stark, who lives on the Portuguese Riviera, south of Lisbon. What's more, with the threat of terrorism looming over the Maghreb, many French buyers are abandoning their ideas of acquiring second residences there in favour of Portugal, a safe country with a low crime rate. "At the property trade fair which we ran in Paris last year, visitors listed safety and security as their number one reason for moving permanently to Portugal," says Carlos Vinhas Pereira, President of the Franco-Portuguese Chamber of Industry and Commerce. As an added bonus, life in Portugal is less expensive than in France. A coffee costs a mere €0.65, a cinema ticket goes for €6 and a good dinner at a restaurant will set you back just €20. The French are also entitled to maintain their social security arrangements while in Portugal.
Where and how much?
In Lisbon, high-end properties tend to go for between €5,000 and €7,000 per square metre. The ultra-luxury sector – depending on the location and especially the view, particularly over the Tagus – rises to €8,000 per m2 on Avenida da Liberdade and as much as €11,000 per m2 in the Chiado, the most sought-after historic district. One developer, has just sold an apartment for €825,000, through the Barnes agency, to a Monaco-based buyer who acquired an investment property in the same building for €365,000. Districts which are currently being treated to a makeover (Alcantâra, Alfama, Santos, and Principe Real) should also see a rapid rise in values, currently hovering between €4,500 and €5,000 per m2 in new or renovated properties. Cécile Gonçalves, director of the Maison au Portugal agency, also sings the praises of Mouraria - one of the oldest districts: "A bit like Montmartre back in the day, it was pretty much to itself prior to the recent series of substantial renovations. The city authorities decided to make it a priority tourism development area. There's certainly great potential there in terms of investment." Meanwhile, on the coast to the west, the pretty scenery is reminiscent of the Riviera, (Cascais, Sintra, Estoril). Many of the more prestigious properties hark back to the Belle Époque in Cascais and the 1940s in Sintra. Their values range between €4,000 and €6,000 per m2. Further to the south, over 100 km from the capital, Comporta is a natural jewel.
"A happy life is a secret life."
Herons and storks continue to nest behind the beaches of what remains a modest village. On a lucky day, you might stumble across the Grimaldis, or the Agnelli family who have a villa nearby and even sometimes, so they say, Nicolas Sarkozy and Carla. The prices here range between €5,000 and €6,000 per m2. Due south is the Algarve, famed for the ultra-luxurious gated resorts of Quinta do Lago and Vale do Lobo. The old adage "A happy life is a secret life" certainly applies to some of Britain's wealthiest denizens who live locally. The values extend from €1m to €3m (Vale do Lobo), and from €3m to €5m on average in Quinta do Lago, with some properties fetching €10m and more. "To make an immediate profit, I recommend investing in short-term seasonal rentals, where the ROI is 8% and sometimes even 10% in good locations," suggests François Coizy, the director of So Portugal. He adds that for a small surface area, the best investments are not in the centre of Lisbon, which is chock full of studios and two-room apartments for rent, but in the Algarve, where the apartments are far less costly. A two-room property in a complex with swimming pool will cost €220,000 for example but can be rented out for €800 per week in the low season and as much as €2,500 in the high season. “It’s an ideal solution for top-end properties. And construction standards are high in Portugal – the finishes are nothing like the way things are done in France," he says. By contrast, large apartments right in the centre of Lisbon are "real investments for the future" as the selection is dwindling. Prices are rising and we haven't seen the end of it yet…