Despite Golden Visa changes, the market continues to grow.
By Alexandra Victoria Kindness
2021 has actually been a pretty phenomenal year. We are witnessing investments of 1.1 billion euros which have been injected into commercial real estate. At One Stop Properties we have had a lot of demand for commercial real estate (36% in offices, 20% in hotels), and unsurprisingly real estate continues to rise here in Portugal.
What are some of the reasons we see the most for people to move here and invest in real estate?
One of the main ones is the way of life and the quality of life of the Portuguese, with a good climate all year round, fantastic beaches and excellent cuisine.
Many people also move because of work: startups are relatively easy to create, many offices move here (Google, Amazon…), and Portugal is becoming more and more welcoming for teleworkers.
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 property?
Another important reason is tax benefits such as NHR and Golden Visa.
But, the Golden Visa regulations changed at the beginning of 2022, will this affect real estate in Portugal in many ways?
The Golden Visa has been restricted in prime areas such as Lisbon, Porto and the Algarve with regards to residential properties, so properties in the 500k range and some in the 350k range (depending on whether they are over 30 years old and have been rehabilitated) that were poor buys to begin with may experience a decline, but the truth is that the market in these blue chip areas is mainly driven by other fundamental pillars as evidenced by the 2021 results.
A second change that we could also see is that more people will invest in central Portugal, Alentejo for example or in the north. These are areas in which you can still invest with the Golden Visa and which also need to be developed. In the long term, there may be questions regarding the liquidity of these areas, particularly if the Golden Visa rules are changed to exclude them. This, as discussed above, is not the case in prime locations that offer strong fundamentals.
We’re going to need improvements and infrastructure in those kinds of areas because they’re going to develop and grow. People are now looking to move out of the city, be a little more rural and able to be self-sufficient, so I predict farms will increase everywhere, especially those. There will also be more opportunities in the center of the country which is actually very close to airports like Faro, Porto and Lisbon.
I predict we’re going to see a lot more investment in those areas, because there’s also the opportunity to invest in venture capital funds and investment funds for the Golden Visa, so capital is going to continue to flow into the country and Portugal is still going to be a very hot spot.
What will happen with Golden Visa properties that have been purchased through the end of 2021?
These properties are going to be kept, I predict that they are going to be rented out and this is something that is essential and on which I insist a lot. There isn’t enough rental supply on the market, so all of these properties are going to be fantastic for incoming students, for digital nomads who need small 1-bedrooms, 2-bedroom apartments to live in, or international families. looking for a “soft landing” in Portugal. These are the perfect Golden Visa properties that have been purchased and they will now be rented out and enjoyed accordingly.
So on the contrary they will not decrease in value, they will increase in value.
We expect the prices to continue to rise with all the high net worth individuals coming for all the reasons mentioned above. Demand is at its highest while supply is at its lowest.
We actually broke records for the most expensive penthouses sold in the city at One Stop Properties. With what is happening this year we know that people are coming and looking for nicer properties with a more international flair and of course that fantastic international standard that you can find anywhere else in cities like New York Paris, Milan or anywhere. other.