This surge, unveiled by the recent statistics from the Bank of Portugal (BdP), not only shatters previous records but also signifies a robust 26% increase compared to the same period last year.
The FDI data, freshly updated in the BdP's database, reveals a cumulative value of €3.018 billion for the first nine months of this year, setting a pinnacle in the BdP series that traces back to 2008. Remarkably, this achievement comes against the backdrop of a globally challenging financial climate and a cooling real estate market in the Eurozone, making Portugal's success all the more remarkable.
Even in the face of the February announcement signaling the end of residence permits through real estate investment, known as "golden visas," the sector's resurgence remains unwavering. The subsequent "More Housing" package, enacted in October, didn't sway the positive trend, with investments soaring despite initial concerns.
Contrary to speculation, the data shows that potential investors haven't ruled out Portugal. FDI in real estate not only breaks records but also accounts for nearly two-thirds of the total FDI flowing into the country by September.
However, amidst the real estate boom, a broader perspective reveals a dip in overall FDI. Until September, Portugal attracted €4.6 billion in new foreign investment, marking a 12% decrease compared to the same period last year. This shift, notably lower since the onset of the pandemic in 2020, hasn't dampened the buoyancy of the real estate sector.
By September's end, the total stock of FDI in Portugal reached an impressive €175.9 billion, with a substantial 90% sourced from the top 20 investing countries, totaling €157.2 billion. The BdP series, notably, considers the end investor rather than the subsidiary's location through which the investment is made.
Leading the charge among foreign final investors in the third quarter were Spain (26.8 billion), France (17.3 billion), the United Kingdom (13.3 billion), and China (12.5 billion). Surprisingly, Portugal also made a prominent appearance on this list, with €25.5 billion invested, owing to the intriguing phenomenon of "round-tripping." This entails a unique passage of investment to and from Portugal by intermediary entities residing in other territories.
Among the top 20 end investors, seven countries surpassed FDI highs in this series that commenced in 2019, including the US, UK, Germany, Brazil, Angola, Switzerland, and Belgium. Notably, Angola led the pack with a remarkable 23% increase in FDI in Portugal, reaching €5.7 billion, followed by Belgium (6.7%) and Switzerland (5.3%).
Portugal's real estate sector emerges as a beacon of resilience and a magnet for international investors, setting new benchmarks and defying expectations in a global landscape rife with challenges.
Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.