Increasing property prices attract high-income foreigners to the country. By making a noticeable contribution to Portugal’s economy, one can apply for the Golden Visa, which is a key to the EU citizenship.
The number of signed contracts would reach its peak in 2018
Portugal’s real estate market has started to show signs of recovery since 2014. The main factors caused the buying activity are the improvement of the economic situation in the country, reduction of unemployment and the upward price trend. Recovery of the real estate market also became possible due to the increased flow of tourists to Portugal. Moreover, purchase of Portugal’s property allows one to obtain a resident status and enjoy the opportunities it offers.
The majority of customers are high net worth foreigners. According to the information provided by Fernando Ferreira, head of capital markets at the JLL, in 2017, 80% of real estate objects were sold to the foreign investors, while the remaining 20% account for the domestic sales. Investors from outside the country are interested not only in residential property but also in commercial spaces, office buildings.
In 2017, the buying activity index hit the record level, it increased by 50%. It is expected that in 2018 the last year’s amount of €1,900,000 will be exceeded and will hit a new mark of €2,500,000-3,000,000.
Portugal’s real estate market becomes stronger
High demand and shortage of supply resulted in the housing price growth. In September 2017, the activity level of Portugal’s real estate buying and renting market reached its peak. Experts in the field of immigration investment are sure that both the demand and the prices will continue to grow in the coming years.
According to the report by Royal Institute of Chartered Surveyors and Confidencial Imobiliário, the real estate prices will rise by 5% this year and in a five-year period — by another 6%. The spa city of Porto will become the center of attraction for high-income investors.
In October 2017, 43% of real estate experts noticed house prices increase. The increase almost hit the record mark that was set in September (54%).
The index of consumer confidence decreased from 41 to 36 in October, because the expectations regarding the number of transactions in Porto failed, and in Lisbon the price expectations became more modest. Starting from September there was observed a drop in demand among the tenants, but it was not something that influenced the increase in rental prices.
As the head of Confidencial Imobiliário states, credit growth influences the local real estate market in a positive way as well. The prices now have almost reached the pre-crisis levels. At the same time, the demand for Portugal’s property remains high. Popular locations are Lisbon and Algarve. House prices here exceed €1,500 per square meter and keep growing steadily.
Portugal’s permanent residency by investment: everything an investor should know about the program — conditions, costs, statistics
The global financial crisis of 2007-2008 had a devastating effect on Portugal’s economy. The government implemented a series of recovery measures to save the country from default. One of such initiatives was the launch of Golden Residence Permit Program, which started to work in 2012.
Since the program launch, the total investment has amounted to €3,360,000,000. The government has issued over 5,000 Golden Visas for a five-year period.
Portugal’s residence by investment program allows one to integrate into the European Union community and offers tangible benefits:
- No border control across the Schengen Area. Those who have an ID card can freely travel to the Schengen countries without a visa.
- Resident permits for all family members. A spouse, children and parents (of both spouses) can apply for residence together with the main applicant.
- Favorable business climate.
- No obligation to permanently live in the country. But in order to comply with the conditions, one should spend at least 7 days a year in Portugal. Good reason to have a vacation, isn’t it?
- Access to the European education, quality health services and legal system.
- Opportunity to receive citizenship in 6 years. Portugal’s residence is issued for a one-year period. Upon expiration of this term, the status can be renewed twice for 2 years. After 5 years of living in the country, one can get the permanent resident status, and in the sixth year, apply for Portugal’s citizenship.
Three ways of investing in Portugal’s economy:
- Real estate. The applicant needs to buy property with the value of at least €500,000. There is a less expensive option: to finance the purchase of constructions built more than 30 years ago or the ones that require renovation. The minimum investment amount corresponds to €350,000.
- Investment in the country’s economy. One should invest €1,000,000 in stocks.
- Launch a private company and create at least 10 job positions for the Portuguese. It is hard to estimate the exact amount of investment required for a business launch.
Why do investors prefer to purchase real estate?
Throughout the five-year period of the program existence, the majority of program participants — 5,105 people — have chosen investment in real estate. Why? Well, we know at least 3 benefits of getting residence by purchasing property:
- Investment in real estate is investment in your future. As the country’s economy is stable, the value of the asset will keep growing. According to the statistics provided by the State Institute for National Development, the average value of housing in the first half of 2017 grew by 8% year on year.
- Opportunity to receive additional income. Since the demand for rental objects is growing, one can rent property and make profit out of it.
- Opportunity to return the investment. Upon expiration of the property retention period, one can sell the property and fully or partially recover the initial amount spent on getting residence.
Portugal does not set unrealistic demands for the candidates. The investor must be an adult person without a criminal record. Prohibition of entry into the territory of the EU, for one reason or another, is a substantial ground for the application rejection.
Portugal’s Golden Visa is a step towards the European citizenship
After the Golden Visa application approval, one can start getting prepared for the process of receiving the country’s citizenship. But before that, it is required to get permanent resident status (in 5 years) and a year later the person can apply for a Portuguese passport.
Portugal’s citizenship provides the right to freely reside, study and work in any country of the EU.