Elizabeth Yu – Real Estate Broker at Berkshire Hathaway HomeServices
Long, beautiful beaches, the azure sea, a mild climate, and social tolerance backed by progressive laws makes Portugal an ideal destination for vacationers as well as international homebuyers. The country has a fascinating history which draws visitors and encourages them to stay and live in this friendly lesser-known Atlantic-facing oasis.
Part of the Iberian peninsula containing Spain, Gibraltar, and Andorra, and as one of the oldest countries in Europe, Portugal was occupied by the Iberian tribes which were invaded by the Celts, then the Roman Empire. The Lusitanians of interior Portugal fought so bravely against the Romans that the conquerers named the territory Portugal and brought to the culture bridges, temples, baths, theaters and statues. Following the fall of the Roman Empire, Portugal was oppressed by the Germanic Barbarians in the fifth century. In the eighth century, the Islamic Umayyad Calphate invaded the Iberian Peninsula, bringing their architecture and language.
The Christians created a kingdom in the north of the peninsula and eventually reconquered the lands from the Muslims. Since about 1255 when Lisbon was declared the capital, Portugal’s land borders have remained virtually the same. The Kingdom of Portugal waged war against Spain, created an alliance with England, which stands to this day, and began the Age of Discovery. The Kingdom built a vast empire with explorations and trade routes all over the world, including the colonization of Brazil, until the Dutch, English and French began to conquer Portuguese outposts and colonies. After a battle with Spain, Portugal didn’t gain its independence again until 1640. After Napoleon occupied Portugal, the country never regained its previous reach and wealth.
Portugal gave up its monarchy in 1910, and following years of dictatorships, became a democracy in 1974. It’s taken decades for Portugal to recover from economic devastation sustained by the loss of its colonies and the plundering of dictators, but the small country of 10 million people is heroically working to make their home the paradise it deserves to be. Internations.org ranks Portugal as the friendliest country towards foreign residents in the world.
Portugal is a world leader with successes in universal healthcare for all residents, legal same-sex marriages, and drug decriminalization. According to USNews.com, Portugal is a founding member of NATO, the Organization for Economic Cooperation and Development and the European Free Trade Association. It’s also a member of the World Bank and World Trade Organization. Portugal is in the top three of the 2020 Global Peace Index, a ranking of the safest countries in the world because of its low crime rate.
And with a consistently improving economy, Portugal is increasingly popular with homebuyers who want an international home and/or investment property, as there are no restrictions on foreign investment. Liveandinvestoverseas.com voted Portugal number one in the World’s Best Places to Retire in 2022.
Portugal’s capital boasts friendly people, low cost of living, fabulous architecture and gorgeous hilltop views. Voted the cleanest major city in Europe, Lisbon also has some of the lowest air pollution. It’s also among the safest destinations and features a robust expat community. Like Rome, the city is spread across seven hills and stunning cliffs. Public transportation and taxis are cheap so you don’t need your own car, even to take a day trip to one of the many beaches or other scenic towns surrounding the city.
Numbeo.com asserts that the cost of living in Lisbon is less than half what it would be to live in New York, and rents are approximately 69% lower. A loaf of bread is 20% cheaper than it would be in Paris.
The cost to buy an apartment in the city center is more than attractive. The price per square foot to buy an apartment in New York City is $1425.25, while Lisbon apartments in the city’s center are $503.46 per square foot or 64.68% less. However, the average salary is $5,937.54 in New York while in Lisbon the average is $1,224.47, or 79.38% less.
Liveandinvestoverseas.com recommends the best areas to buy a property in Lisbon are Chiado, Principe Real, Lapa, and Avenida da Liberdada, but the site also warns that high demand is causing prices to rise. Investors are turning to buy properties in Santos, Intendente and Mouraria. Other recommended areas are Alfama, Graça, Campo De Ourique.
With over 100 miles of coastline, the Algarve is the best-known secret in Europe, boasting many of the best beaches, golf courses, and year-round sunny micro-climate, says Kathleen Peddicord, publisher of the Overseas Opportunity Letter. It’s also Europe’s newest tax haven and a popular summer and winter retreat among Europeans with more sunny days than anywhere else on the continent.
Portugal relies heavily on tourism so English is spoken everywhere, but more so in the Algarve, due to many British families settling there after World War II.
Among the most sought-after region is Silves, with its rich agriculture, the Arade River and fragrant citrus groves. White sandy beaches beckon in the coastal town of Armação de Pêra.
Despite its charms, The Algarve was never overbuilt as were many other Mediterranean destinations.
Cascais is a popular tourist destination in the Lisbon District with gorgeous coastal views. It’s also one of the wealthiest municipalities in Portugal, so be prepared for some of the highest property values in the country. Cascais is ideal for those looking for high-end real estate. As you get closer to the marina or the center of town, expect to pay more.
Small enough to explore on foot, and large enough for industry and agriculture with competitive labor, Porto still has plenty of room for appreciation in properties and it’s getting a lot more notice since the new airport was built, attracting more than 11 million passengers with low-cost airlines.
With tourism on the upswing, Liveandinvestoverseas.com says for every 100 euros invested in a property for tourists, investors can “expect to get on average 12 to 14 euros of annual revenue from the daily rates sold in Porto,” suggesting that 100,000 euros will generate 20-year revenues of 260,000 euros in Porto, with a 20-year yield (gross return on invested capital) at 260%.