Emerging from its economic difficulties, which involved a bailout from the European Union and International Monetary Fund in 2011, Portugal’s various structural reform initiatives have helped revive its property markets.
This is according to James Bowling of Monarch&Co, a company which offers residency and citizenship programmes, investment properties and capital investment opportunities in hand-picked territories around the world.
Bowling explains, in an effort to promote long-term growth, Portugal’s government had to make drastic changes to the historically pro-tenant leasing market in 2012. These new changes led to greater flexibility in lease terms, making the investment market more appealing and giving landlords greater incentive to enter the market. This quickly attracted the attention of local and international developers and investors.
In addition to these changes, Portugal launched what would become, one of the world’s most successful residency and citizenship programmes in the same year. The Golden Visa programme allows non-EU nationals the opportunity to invest a minimum of €500,000 into the real estate market in exchange for citizenship for the investor and their qualifying dependents. Bowling emphasizes that foreigners are not required to emigrate, and only need to visit Portugal for seven days in the first year of residency and on average 7 days per year thereafter.
According to recent statistics from the Portuguese Government, the programme has contributed in excess of €2 billion to the country’s economy to date. €1,89 billion of this total has been invested into the real estate market.
Statistics also confirm the popularity of the programme, revealing 3,452 residence permits have been issued to primary investors and an additional 5,265 to their qualifying dependents since its inception. Monarch&Co have been responsible for processing nearly half of the 96 successful South African applications.
Bowling says the majority of Golden Visa investors purchase for investment, but with a longer-term view to make Portugal a permanent home. ‘The programme’s success has been attributed to its investment criteria, reputation and residency leading to citizenship in a safe and secure mainland European country,’ he says.
Whilst new apartments are being constructed and historic buildings are being redeveloped to meet modern day investor demands, improved market conditions have also fuelled commercial investment volumes. In total, €1.9 billion was invested into the country’s commercial property markets in 2015.
The growth of the sector, a 154% increase, is largely attributed to Portugal’s economic recovery and the return of investor confidence, says Bowling. The devaluation of the Euro against the Dollar and low levels of return in the U.S. domestic markets contributed as well.
“For investors looking to diversify their portfolios and enjoy the benefits of the European lifestyle, Portugal is undoubtedly a great solution”, concludes Bowling.