LISBON: Portugal’s 2011-14 debt crisis now firmly behind it, signs of an economic resurgence have boosted confidence in the country’s real estate market among both domestic and foreign investors. GDP growth for 2017 was revised up from 1.8 percent to 2.6 percent, with public debt and the budget deficit continuing to shrink. Unemployment, which hit 17.5 percent in 2013, has fallen to 8.9 percent, and is forecast to drop to 7.8 percent during the coming year. Upgrades of Portugal’s credit rating to investment grade are also improving funding conditions and reducing credit costs. And while all sectors saw strong performance through 2017, with investment opportunities across core, core plus and value add assets, the retail and office segments are forecast to attract most investment this year.
Portugal’s residential market continues to exceed expectations, helped by a significant increase in domestic demand due to a general improvement in living conditions, and easier access to and affordability of bank loans. The favourable conditions have led to an 83 percent increase in the number of sold units in Lisbon in the last three years. And while the residential price index has been climbing steadily from its 2013 lows, Lisbon is still considerably more affordable than other European capitals. While national buyers seek these new zones for price reasons, international buyers are attracted to the alternative lifestyle these zones offer,” says Empis. “For example, the Beato zone is establishing itself as a startup hub and as a cradle for alternative businesses, which is the new focus of several residential developers, where new projects are emerging.”
The combination of strong market demand, plus a solid pipeline of residential projects, including some large-scale developments, is set to make 2018 another active year for the residential sector.
