By Anne Brightman in collaboration with Mariska Schultze
My jaw dropped! That was a 7% yield on an apartment that was not even on the market as a rental property. A year ago this apartment would have been worth €4.000 per month tops. There is such limited stock now that clients are entering into bidding wars for rental properties. Around one quarter of all Real Estate in Portugal are rental properties according to the National Research Institute and the numbers will increase this year. For investors seeking long-term yields this is good news.
For those of you that have not noticed, global Real Estate markets are on fire. This craziness is reflected in logistical, commercial, residential and hospitality/tourism segments and the bubble is not about to pop, at least not in Portugal. Lisbon is ranked 16th on the Price Waterhouse Cooper list of most attractive cities for Real Estate investments in 2022. Property prices in Portugal started to recover in 2014 and have been rising ever since. Housing prices rose by 11.7% in 2019, 6% in 2020, 13.8% in 2021, and some are predicting it will go as high as 20% in 2022. There is such limited stock that clients are entering into bidding wars for rental properties.
This is great news for Sellers as many would-be Renters are now considering buying a property. In many cases the mortgage would be less than the monthly rental fee and with interest rates so low, why not? One of the issues with that however is that housing prices are rising so quickly that bank appraisals can’t keep up. Although evaluation prices increased in March actual property values are still frequently higher than appraisals. In this hot market cash is king and the call to action is - if you like it put in a strong offer and pray!
Anne Brightman is Founder and CEO of Brightman Group Luxury and Investment Real Estate and a regular contributor to The Portugal News. She can be seen on HGTV´s Home Hunter program as the Real Estate agent for Portugal´s Gold Coast. Connect with her through LinkedIn or the website www.brightmangroup.com.