With its cultural life, sunshine, beaches and outstanding newly-introduced tax regime, Portugal is the new dream factory of southern Europe. This market offers remarkable opportunities for a gilded retirement and is the perfect place to hunt out that dream second home.
Last May, the cream of the Portuguese property market came to show their wares at the Paris Expo at the city’s Porte de Versailles complex. The three-day event saw 14,000 visitors – as against 4,000 last year – strolling up and down the aisles of this trade fair dedicated to bricks and mortar. Major deals were struck, such as the 50 reservations signed with Libertas, one of the key players in promoting the country. The growing popularity of Portugal comes as a surprise to no one because, since 1 January, foreigners have enjoyed the highly advantageous tax status of ‘non-permanent residents’. Professional income is taxed at 20% and certain retirement pensions are totally tax exempt, in exchange for 183 days per year in this sunshine-filled country. What more could anyone want! This virtual tax haven has attracted over 2,000 French buyers in the last year alone. The organisers of the trade fair expect to see 20,000 more succumb to the alluring charms of Portugal by 2015.
Breaking news: Portugal has just officially escaped the control of its trio of creditors (EU, IMF, ECB), which had imposed a drastic policy of economic rigour over the last three years.
Interest rates in the bond market have therefore returned to the European average. Exports and tourism, which had weathered the downturn, have continued to grow valiantly. Experts are confidently banking on GDP growth of 1.2%. ‘There has been a ripple effect, in the wake of which the country’s main indicators are now all green,’ says Carlos Vinhas Pereira, president of the Franco-Portuguese Chamber of Commerce and industry. Given that the property market likes nothing more than a climate of confidence, the positive signals emitted by the country therefore immediately triggered a renewed interest in bricks and mortar. In the footsteps of the retirees, investors turned out in force, all the more eager now that the rental market has been unshackled from rent control. ‘People generally talk of a return of 6 to 8%, which leads to relatively low purchase prices,’ says Pereira. As in neighbouring Spain, prices have tumbled significantly. Since 2008, falling demand caused by the financial crisis has led to a drop in value of 40 to 50% and even of 20 to 30% in the sought-after south. But the last year has been marked by a 7% upswing, caused largely by the revival of international demand. During the first quarter of 2014, 3,500 transactions were made by foreign customers – representing 14% of the total.
Lisbon: historic heritage
In terms of area, Portugal is a small country, six times smaller than France. However, the scenery is just as varied. In the mountainous landscapes of the north, the climate can be relatively harsh and there is still a significant rural presence around the city of Porto with its famous vineyards. It’s the complete opposite in the Algarve to the south. This Portuguese Riviera has little to envy its French counterpart: long strips of white sand, golf courses as far as the eye can see, luxury villas and resorts packed with hotel services.
In the centre, on the right bank of the Tagus estuary, is the capital, Lisbon, with its impressive historic heritage and Atlantic climate influenced by the mild Gulf Stream. ‘In Lisbon, the most sought-after districts such as Chiado, Belem and Restelo are full of historic buildings converted into split-level flats and small town houses,’ explains Samantha Mendes from the O & O agency, an acclaimed specialist in the small world of Portuguese luxury real estate. A 230 m² three-room flat with 2 to 3 parking spaces will go for €1.1 million, on the first floor of a two-storey building. As in Paris, there is no premium for the upper floors. Meanwhile, an 18th-century palace, entirely restored set in 2 ha grounds will fetch around €7.5 million. Lapa, the embassy district, is one of the most highly prized, as is the area around the Castelo de São Jorge, not to mention the Avenida da Liberdade, Lisbon’s upmarket fashion district.
Just 25 km from Lisbon Cascais and Estoril are the two pearls along the Atlantic Coast. They combine the residential and urban chic of the upmarket Paris suburb of Neuilly-sur-Seine, with the coastal allure of the fashionable Norman town of Deauville. ‘French clients are most drawn to the flats in the old centre of Lisbon, but interest is growing in other areas such as Cascais and Estoril, because of their proximity to the sea,’ explains Nathalie Garcin.
About a year ago, the Emile Garcin group partnered up with the Portuguese agency Luxus, known for its expertise in high-end properties, with a portfolio that includes, for example, a contemporary 400 m² house in Cascais set in 900 m² grounds and a pool for €1.25 million.
The little coastal city of Cascais is famous for its old-world charm, narrow streets and beaches. Meanwhile Estoril plays the casino card, with the largest games room in Europe. ‘There’s everything you need in Portugal,’ says Nathalie Garcin. From the best medical facilities to banks to French insurance companies but unfortunately French is no longer the main foreign language taught in schools, which is now English. But even if they can’t speak French, a number of Portuguese still have basic working knowledge.
The Algarve twins
The Algarve, most popular with the British, Dutch and Scandinavians, is the very epitome of the south, on the border with Andalusia, and boasts one of the highest sunshine rates in Europe. Although brimming with holiday homes, the region has its own university and international schools, enabling you to live there with your children throughout the year. Around 15 minutes from the international airport in Faro, in the heart of the Algarve Golden Triangle, is the prestigious golfing resort of Quinta do Lago. The country’s most luxurious properties nestle here amid the pine trees and behind high fences. Nearby Vale do Lobo is also a hotel and leisure complex for golf enthusiasts, but with a more pronounced family atmosphere.
Examples abound here of the services that explain the success of Portuguese resorts: fitness, wellness, medical centres, around 15 restaurants. According to Marie-France Gauvin, whose Property agency has exclusive rights to represent the complex in France, ‘Vale do Lobo is far more than just a holiday resort. It’s always busy, thanks in particular to the golf tournaments, and it’s a great place to live all year round.’ Building land around here is worth between 1 and €3 million. An old detached house with character starts at around €400,000 and can fetch up to €3 million. A 150 m² flat with Jacuzzi will cost you €750,000. As a buy to rent with a guaranteed rate of 4%, it will set you back €830,000. The icing on the cake: for €3 million, you can treat yourself to a 300 m² waterfront villa, with views of the golf course and an architecture comparable to the dream houses in the very finest pages of interior design magazines.
© JON ARNOLD / HEMIS.FR / VALE DO LOBO ALGARVE / DR