Lisbon – Portugal’s prime residential property market.
25 June 2016
Sales of property in Lisbon's historic city centre soared 80% between 2008 and 2015, according to new survey data. As Portugal’s capital city becomes increasingly popular with property buyers, a new report from Savills International lifts the lid on this prime residential market.
In 2015 there were 2,199 property transactions recorded in Lisbon city centre, worth a total of €708.5million according to figures from sector magazine 'Confidencial Imobiliário'. This constitutes an 11% year-on-year increase in transactions, and a 37% increase in total spend. These figures also show a massive 80% surge in transactions since 2008, when 443 deals recorded worth a total of €160.9million.
After years of market stagnation, property sales in Lisbon began climbing once again in 2013. There were 1,340 properties bought in Lisbon city centre that year, worth a total of €291million, and this growth continued throughout both 2014 and 2015. In fact, of the 8,000 property transactions recorded in the past decade, approximately half of these took place between 2014 and 2015; highlighting the considerable increase in popularity that the region has experienced, and continues to experience to this day.
Why buy property in Lisbon?
Portugal’s business and cultural hub, and the country’s largest tourist destination, Lisbon’s property market is growing rapidly. Since the introduction the Golden Visa programme in 2012, €1.56bn has been invested into Portugal’s residential property market, with a large chunk of this being focused on the capital.
The recent soar in demand for property in Lisbon has served to support the city’s economic growth and drive up prices across the region. In 2015 property prices increased 22.3%; backed by improvements to tourism and significant urban regeneration. Despite this, property in Lisbon is still much cheaper than many Western capitals.
Mainstream residential properties in Lisbon are currently priced at an average of around €1,280psm – two thirds that of Madrid (€2,100), a third that of Berlin (€3,400) and a tenth of London (€11,400)! A similar theme is evident in Lisbon’s luxury property market, where an average price per sqm of €5,000 is significantly lower than the €6,700 in Madrid, €13,600 in Paris and €26,400 in London.
Many investors are also seeing the potential in Lisbon’s buy-to-let market. While average long-term rental yields are currently around 4%, Lisbon’s rapid growth as a tourist and holiday destination makes it perfect for short term holiday rentals; providing investors with the higher rental yields and greater flexibility to occupy the property themselves for significant periods throughout the year.
As Portugal emerges from the financial crisis, property in Lisbon is primed to be one of Europe’s best performing assets over the next decade. While prices steadily rise, property buyers have a fantastic opportunity to purchase while prices are still low and reap the rewards of Lisbon’s incredible capital appreciation potential.
If you’re considering purchasing property in Lisbon; whether as a rental property or a second home in the sun; call a member of our team on +44 (0)1202 765011 or email [email protected] for more information on our stunning collection of properties in Lisbon.