2021 has actually been quite a phenomenal year. We are seeing investments of 1.1 billion euros that have been injected into commercial real estate. At One Stop Properties we've had a lot of demand for commercial real estate (36% into offices, 20% into hotels), and with no surprise real estate is continuing to rise here in Portugal.
What are some of the reasons that we see the most for people moving here and investing in real estate?
One of the major ones is the Portuguese lifestyle and quality of life, with a good year-round climate, fantastic beaches, and great food.
A lot of people are moving also because of the work: startups are relatively easy to create, many offices are moving here (Google, Amazon...), and besides that Portugal is becoming more and more welcoming for remote workers.
Banks have continued to lend money and provide mortgages at very low-interest rates, so why would you want to rent if you can actually buy a property?
Another big reason is fiscal benefits such as NHR and Golden visa.
But, Golden Visa regulations changed at the start of 2022, will this affect real estate in Portugal in many ways?
The Golden Visa has been limited in prime areas such as in Lisbon, Porto and the Algarve as far as residential properties are concerned, so properties at the 500k range and some in the 350k (depending if they were over 30 years old and had been rehabilitated) which were poor purchases to begin with may experience a dip, however the truth is that the market in these prime areas are predominantly driven by other fundemental pillars as the 2021 results testify.
A second change we may also see is that more people will be investing in the centre of Portugal, Alentejo for example or up North. These are areas that you can still invest in with the Golden Visa and that also really do need some development. Long term there may be questions around the liquidity of such areas particularly if Golden Visa rules are changed to exclude them. This, as touched on above is not the case in prime locations that offer solid fundamentals.
We're going to need some improvements and infrastructure in these sorts of areas because they are going to develop and grow. People are now looking to move out of the city, be a bit more rural and able to be self-sufficient, so I predict that farms are going to go up everywhere particularly those . There are also going to be more opportunities in the centre of the country which is actually very close to airports like Faro, Porto and Lisbon.
I do predict we're going to see a lot more investment in these areas, as it is also possible to invest into VC funds and investment funds for the Golden Visa, so capital is going to continue to be injected into the country and Portugal is still going to be a very hot spot.
What is going to happen with Golden Visa properties that were bought until the end of 2021?
These properties are going to be held onto, I predict they are going to be rented out and this is something that is critical and I stress a lot about. There is not enough rental supply on the market, so all these properties are going to be fantastic for students coming in, for those digital nomads that need little T1 bedrooms, T2 apartments to live in or international families looking for a 'soft landing' in Portugal. These are the perfect Golden Visa properties that have been bought and they're now going to be rented out and appreciate accordingly.
So on the contrary they're not going to decrease in value, they're going to increase in value.
We do predict that the prices are going to continue to rise with all the high net worth individuals coming for all the reasons mentioned above. Demand is at an all time high while supply is at an all time low.
We've actually broken records for the most expensive penthouses sold in the city at One Stop Properties. With this happening just this year, we do know that people are coming and looking for more beautiful properties with a more international feel and of course, that international fantastic standard that you can find anywhere else in such cities as New York Paris, Milan or anywhere else.