Portugal dominates rankings of best locations for overseas property investment
10 February 2017
Portugal’s most popular destinations have dominated rankings of the world’s best places for overseas property investment, with the Algarve and Lisbon taking first and second place respectively.
The result comes courtesy of publisher Live and Invest Overseas, who recently released their ranking of the best destinations for overseas real estate investment in 2017. While Portugal’s capital city, Lisbon, took the number two spot, The Algarve took the top spot based on a combination of increasing tourist demand and restrictions to coastal construction limiting the supply of property.
It’s little surprise that Portuguese destinations ranked so highly. Following the global economic downturn of 2008, the country’s government have increasingly sought to make buying property in Portugal attractive to overseas investors. The country’s revered Non-Habitual Tax Residency regime effectively provides a 10 year exemption from income tax on overseas income for non-residents spending 183 days a year in Portugal (subject to meeting the scheme’s criteria) while the country’s Golden Visa Scheme is widely considered the most successful Citizenship by Investment type programme in Europe.
Lisbon has long been an attractive destination for overseas investors. With high returns and low property prices comparative to many major cities across Europe, buying property in Lisbon presents a fantastic opportunity for Return on Investment. Labelled the ‘California of Europe’, the capital city is Portugal’s business and cultural hub and currently offers affordable property prices, which are rising quickly. Prices in the city rose 22% in 2015, with this trend continuing throughout 2016. As prices rise, property owners in Lisbon are experiencing outstanding capital appreciation on their properties.
The Algarve is often seen as a destination for a lifestyle property purchase; famous for its warm weather, beautiful beaches, world-class golf facilities and over 100 miles of picturesque coastline. Portugal’s most beloved coastal destination does, however, also boast its own variety of unique property investment incentives. The region’s various attractions and golf courses create a rental season which extends far beyond the summer months; meaning investors receive rental returns for much longer periods throughout the year.
With The Algarve’s increasing popularity comes a growing demand for rental accommodation, while restrictions to coastal construction have left a limited supply of available properties. This supply-demand imbalance increases both the rental rates property owners are able to charge, as well as the overall value of the property; creative significant ROI over both the long term and the short term.
Portugal has long been a popular choice with overseas buyers, based on the obvious lifestyle benefits combined with the increasing number of government backed incentives. Now, with Lisbon and The Algarve dominating rankings for the best investment locations, it seems clear that property in Portugal will continue to be a popular choice for years to come.