All the actors in the field agree. The sudden rise in property prices in Portugal, and especially in Lisbon, finds its explanation in a variety of factors. For Paulo Loureiro, CEO of Louvre Properties, a major investment company, it all started in 2011 when the Troika worked to reform a set of obsolete laws and regulations on housing. The effect was immediate and “significantly boosted the demand” of foreign investors thus bringing the Portuguese market “into a virtuous circle.” The establishment of an advantageous tax system combined with an effective Golden Visa program did the rest.
The real estate market has been so dynamized that almost a decade later, prices are still rising, even reaching 10,000 euros/m2 in some parts of the capital. Selling is no longer a problem and buying is at the heart of every concern. Quickly, and at the asking price. So much so that many buyers are persuaded by simple 3D plans and the reputation of builders to invest. “If you want a certain standard of apartment in a specific area, you have no choice, you have to pay and wait a year or two before delivery, says Paulo Loureiro. The market is bubbling. The place for hesitation, almost zero.
Obviously, this craze has led to a profound transformation of the city. “We are experiencing a new phenomenon: real estate pressure in the center of Lisbon is forcing the middle class to turn to alternatives located in the periphery,” says Joao Sousa, CEO of JPS Group, a real estate investment company, which welcomes the emergence of these new attractive neighborhoods.
Towards a decongestion of city centers
Betting on a boom in this market “for the next 5 or 6 years”, JPS Group is turning a large part of its strategy towards the construction of “eco-responsible and high quality properties in terms of quality and architecture” to the exit of the big cities. “The real estate investment in Portugal was mostly made in the rehabilitation of the centers. But it was to forget that the people who lived there also needed shelter. And according to him, the creation of these new poles could be appealing in many ways. In addition to the decongestion of city centers, it should lead to price harmonization, an essential phenomenon for a more stable market that would avoid the creation of a real estate bubble.
In a statement shared by Hugo Santos Ferreira, Vice-President of APPII, the Portuguese Association of Property Developers and Investors: “The offer is today insufficient to meet the very strong demand of the market. Our role as an association is to work to increase this offer, by explaining to the government, developers and investors that we need a housing recovery strategy. The market is changing, but I think it should stabilize and avoid a real estate bubble.”