Updated: October 13, 2024
Lisbon, and Portugal in general, has seen an uptick in luxury properties as international investors have noticed the many perks that the Portuguese property market brings.
On a global scale, luxury residential property rental prices have continued to increase across the globe, most noticeably in Dubai, which experienced a 12.1 percent increase, and Bangkok, which saw a boost of 9 percent.
Clocking in at third position, and the first European city, was Lisbon, which saw a 7.5 percent increase in residential property rental prices, underlining the fact the Portugal’s capital is a top city to consider for prospective property investors.
The Prime Residential Cities Index
Luxury property rental prices have increased by 2.2 percent in the first half of 2024, according to the Prime Residential World Cities Index study by Savills. According to the study 25 out of the 30 markets that were analyzed around the world experienced an increase in rental prices.
The top three: Dubai, Bangkok, and Lisbon
Looking at the three top cities that have experienced the highest increase in luxury rental prices, the hike in prices in Dubai and Lisbon is mainly the result of growing demand, mainly from foreigners, and the lack of supply of high-end properties available for rent on the market. This inevitably pushes up the prices.
In Bangkok, demand for luxury rental properties has increased as a result of higher interest rates and the spirited return of tourists and expats following the COVID-19 pandemic.
Other EMEA countries
The study also highlighted that in many EMEA (Europe, Middle East, and Africa) markets, demand outstripping supply for properties to rent has boosted prices in prime locations across the region.
None of the EMEA markets experienced a fall in rental prices from December 2023 to June 2024. For example, Athens, Berlin Amsterdam, Barcelona, and Cape town registered prices increased of more than 3 percent in the first half of 2024.
Lisbon: Firmly on the Radar of Foreign Luxury Property Buyers
Lisbon has taken center stage as foreign investors have noticed the unparallelled quality of life that the capital of Portugal offers to those who live there, with the value of prime rentals set to continue to rise.
The Associate director at Savills World Research has commented that “Dubai and Lisbon have been perennial leaders in terms of growth in their prime rental markets due to the excess demand for high-quality properties to rent”. This highlights that while Lisbon, alongside Dubai, is a good investment right now, owning a real estate asset here will continue to increase in value in the future.
Lisbon: A Unique Opportunity for Investors
Portugal luxury real estate has cemented itself as being one of the top property markets to invest in, with the capital, Lisbon, being the European city that has seen the biggest increases in luxury rental property prices is testament to this.
The continued increase in luxury properties in Lisbon provides an attractive opportunity for prospective investors with rental yields for the Lisbon Metropolitan Area standing at 6.7 percent towards the end of 2023.
There are no restrictions on foreign property ownership in Portugal, and combined with a high quality of life, dynamic real estate market, and continued demand for luxury properties, investors doubling down on Lisbon’s real estate market are likely to secure a strong return on their investment.
Looking to invest in Lisbon? Find out more in our ultimate guide
