Things are looking up for the Portuguese property market. The House Price Index (HPI) from Statistics Portugal (INE) has reported that house prices in Q2 2015 were up 2.9% on a year before. When compared to Q1 2015, the HPI increase reached 3.7%.
In addition, the latest RICS/Ci Portuguese Housing Market Survey reported that demand has outpaced supply when it comes to the Portuguese property market. Rents have risen for the first time in more than three years and house prices are continuing their modest recovery.
When it comes to buyers from overseas, every country has their preferred location for second homes. Recently released data from Spanish homebuilder Taylor Wimpey España has highlighted Germans' love of Mallorca, with purchases by Germans increasing 160% in the year to August, while Italian fractional ownership company Appassionata has been flooded with enquiries from the US of late.
So, who's buying in Portugal, where and why?
Chris White, Founding Director of boutique estate agency Ideal Homes Portugal, comments,
"The demographics of Portuguese property ownership are really interesting right now, particularly when it comes to buyers from overseas, as there are clear national preferences being shown. Portugal offers several distinctly different regions, so buyers can choose according to what they prefer."
According to Savills, many Chinese buyers are opting for homes in Lisbon, where a four bedroom apartment in an exclusive area can be snapped up for €986,250. Portugal's golden visa scheme has been a major draw for Chinese property investors looking to move to Europe. By June 2015, some €1.46 billion had been generated by the scheme, with more than 80% of the visas issued going to Chinese buyers.
While the Chinese are enjoying city life in Lisbon, British buyers are overwhelmingly heading for the sun, sea and golf courses of the Algarve, preferring the relaxed beach lifestyle to the pace of the city. Some 80% of Ideal Homes Portugal's buyers hail from the UK, with the rest made up of Portuguese, Irish and French buyers.
According to Savills, the established, luxury resort of Quinta do Lago is enjoying a sustained recovery, with sales there increasing by 34% in 2014. Quinta do Lago has long been popular with British buyers. Properties range from furnished two bedroom apartments for around €350,000 to sumptuous mansions with terrace, pool, Jacuzzi, wine cellar, elevator, library and extensive grounds with fountain and barbecue pavilion (price on application).
According to Rightmove, buyers from France and Norway are also keen to be part of the Portuguese property market right now, while Diogo Gasper Ferreira, President of the Association of Portuguese Resorts is considering future demographic shifts in Portuguese property ownership. He comments,
"Approximately 15% of people in northern Europe with free wealth of more than €2 million have a second home in Southern Europe. But if you apply the same criteria to wealthy individuals in Eastern Europe it's less than 05%.
"I think in future we'll see Polish buyers here. It's a big market of almost 40 million people and they're becoming richer. I think we will see Russian buyers, too. Russia is a market of 140 million people, more than twice the size of the UK, and there are many Russians with the potential to buy property at €500,000 to €1.5 million."
Ideal Homes Portugal's Chris White agrees, but also highlights the potential for buyers from the UAE to embrace Portugal as their second home destination of choice, adding,
"It will be interesting to see the impact that the granting of visa-free access to Emiratis visiting the Schengen zone has on property ownership in southern Europe and particularly in Portugal. This is a hugely wealthy market and the Algarve has some fine villas just waiting for the right owners to come along."
When it comes to buyers' age, Rightmove's data has shown that the average buyer is between 55 and 64 years old. The company has also revealed that island living on Madeira is buyers' third location preference, after the Algarve and Lisbon, and that 57% of those looking to buy currently plan to fund their purchase with cash.
For further details call Ideal Homes Portugal on 0800 133 7644 or +351 289 513 434, email enquiries@idealhomesportugal.com or visit www.idealhomesportugal.com.
