Investors Attracted to Property in Lisbon in Portugal

Looking at why real estate in Portugal’s capital city of Lisbon is once again of interest to property investors

We first highlighted the delights of property in Portugal’s capital Lisbon back in 2005 when there was a slow return to the market of international interest - buyers were aware that the city had not seen dramatic price rises and that it might be on the brink of significant development and regeneration.

Today news has been released that investors attracted to property in Lisbon in Portugal are flooding the market with interest because prices are now so far below all other European cities and much of Lisbon has already benefited from regenerative cash and development.  Additionally, a new transport system is about to make the whole of Lisbon more accessible and employment and tourism opportunities in the city are on the increase - therefore if you’re looking for a great place to invest in property in Portugal why not consider its capital city?

Currently property prices in Lisbon are about a quarter of prices for real estate in London and about half what you might expect to pay in the capital and leading cities in France and Spain for example.  In fact prices have hardly moved above inflation in the past five years and now actually represent fantastic value for money even before one looks more closely at how well and how fast Lisbon is developing and improving.

You can expect to pay about GBP 2,000 to GBP 2,400 per square metre in the best areas of the city for new real estate and as low as GBP 1,300 per square meter in suburbs less in demand or less well known.  Alternatively, if you buy up a fully renovated property that has retained its historic character whilst being totally upgraded you’re currently looking at spending an average of GBP 2,200 per square meter.

So, the fact that property prices are a fraction of those in other capital cities in Europe means that real estate is affordable and well priced – but what is it specifically about Lisbon that makes it either a good place to buy an investment property or a great place to purchase a second or even principal residence?

Well, in terms of investing in property in Portugal most people would only ever consider the Algarve or possibly the emerging Silver Coast – but actually Lisbon offers a two tier approach for property investors in Portugal.  Firstly, because the city is about to get a high speed rail link to Madrid and already has an international airport and is significantly accessible from across Europe, it is of increasing interest to tourists and indeed tourism interest is on the increase…

Because Lisbon was such an attractive and culturally and historically interesting city, a few years ago there was a general push locally to vastly improve not only the city’s façade and its amenities and attractions, but there was a concerted effort made to raise international awareness about the wealth of things to do, see, experience, sample and enjoy in Lisbon.  These collective efforts have paid off and now tourists are coming in greater numbers annually and seeking short term rental accommodation.

Investors who buy one or two bedroom apartments in the heart of the city or spend money restoring apartments in character buildings can earn a nightly rental income of about GBP 50 – 70 from the tourism market in Lisbon. 

The second investment approach available to those seeking an income would be to let longer term to the professional marketplace where demand is increasing steadily as the economy of Lisbon improves and more job opportunities present themselves.  A realistic long term rental income would be about GBP 650 – 700 a month for a two year contract on a small apartment.

For those seeking a property to reside in or in which they themselves can holiday, Lisbon is a great location to consider because as stated, prices are low and have not increased dramatically.  This means that as the city continues on its path of improvement and development, so it is likely that prices will increase over time giving a buyer a decent return on their initial investment – and in the meantime they can enjoy living or holidaying in an exciting, lively, beautiful and thoroughly interesting city.