Updated: September 18, 2024
Portugal remains firmly on the radar of US and Brazilian nationals and looks set to continue to be one of the hotspot countries that both nationalities seek to invest in in the near future.
The Current State of Play
Fewer houses have been purchased in Portugal recently, with data from the National Statistics Office (INE) showing that the number of transactions has fallen by 4.1 percent in the first quarter of 2024 when compared with the same period in 2023, and by 3.1 percent when you compare this figure with the last three months of 2023.
INE also shows that the most significant drop in transactions was amongst foreign buyers. This drop coincides with the end of the current Non-Habitual Residence (NHR) Program under the old terms, and the real estate investment option of the Portugal Golden Visa also being done away with.
However, despite data showing a fall in property purchases, key experts in the field of real estate have highlighted that the country very much remains on the radar of foreign buyers from the USA and Brazil.
Interest Remains from North American Buyers
More American nationals have relocated to Portugal than ever before, seeking the higher quality of life, safety, and climate that Portugal offers. 60,000 expats are believed to have moved to Portugal, with 11 percent of these hailing from the USA.
While 2023 saw less US nationals snap up properties in Portugal, looking forward to the rest of the year, it is predicted that house sales will pick up the pace, with 2025 and 2026 also being highlighted as key years that will see a greater number of American nationals’ head to Portugal or snap up property, as investors look outside Spain and Italy to new markets.
In particular, US investors are turning their attention to certain real estate sectors, such as luxury residential real estate retail, and hospitality. Anthony Domathoti, the president of the North American mediator EXIT Realty Premium, has stated that Real Estate Investment Trusts (REITs) have been purchasing assets across all segments of the market but that it is only a matter of time before hospitality becomes a central pillar.
There is also likely to be a trend in investors looking outside Lisbon, the capital of Portugal. Here, and in other key locations in Portugal, there are currently restrictions on property owners obtaining new Alojamento Local (AL) Licenses, which are needed to rent out certain property types in the short term. As such, investors will be looking to other parts of Portugal for investment opportunities.
Bear in mind that the Portuguese government has stated that it is currently reviewing certain restrictions placed on investors under the More Housing Bill (Mais Habitação Bill) that was passed in October 2023. To find out more about the current state of play, you can check out our article on the topic here: What is Changing Regarding Portugal’s Short-Term Rentals?
What attracts US investors to Portugal?
So, what have been the driving factors for US nationals setting their sights on Portugal? Domathoti praised Portugal’s resilience and post-COVID-19 recovery, alongside pinpointing property prices in Portugal to be lower than other countries.
With the backdrop that Portugal is one of the safest countries in the world – ranking in seventh position in the 2024 Global Peace Index – and is economically stable, Domathoti anticipates that large funds and groups will invest considerably in the country soon, such as KKR, Blackstone, and Cerberus.
Brazilians to Continue Investing in Portugal
Portuguese real estate investments have been increasingly popular with Brazilian nationals. The similarity in language, certain cultural aspects, and family ties make Portugal an attractive option for Brazilians seeking to relocate to Europe.
João Teodoro, president of the Federal Council of Real Estate Brokers (COFECI)-Regional Council of Real Estate Brokers (CRECI) of Brazil, has highlighted that there has not been a great decrease in interest from Brazilian investors but has pointed to the problem of construction, where there is less supply for housing in Portugal that has subsequently led to price increases. Despite this, he remains confident that Brazilian investors will continue to invest in Portugal in the future.
What attracts Brazilian investors to Portugal?
Alongside similarities in language, culture, and family ties, the safety aspect is a significant draw for Brazilian. While Portugal ranks as high as seventh in the 2024 Global Peace Index, Brazil is in 131st position, with many Brazilian investors considering Portugal for a better, and safer, quality of life.
Lisbon, in particular, is a favorite for Brazilians, which as one of the most captivating cities in Europe, rightly catches their attention.
Find out more about investing in Portuguese real estate
