Portugal is an incredibly popular tourist destination, in fact it is always in the top 20 most visited locations in the world – and yet its property market often fails to hit the headlines as it is not an emerging market returning record if unsustainable returns, nor is it one of the most expensive markets in Europe that speculative comment can hone in on as likely to implode any time soon!
If you’re looking for a market with sustainable and strong demand where there are a series of excellent fundamentals upon which a purchase and investment decision can be made, here are ten reasons to buy property in Portugal.
1. Golf Tourism
Globally speaking, golf tourism is growing up to four times faster than any other form of tourism and golf tourists spend far more than just your average sun, sea and sand tourist - and it’s a well known fact that the Algarve in Portugal is THE number one golf destination in the whole of Europe. What this means is that the average 200,000 golfers who holiday in Portugal annually are contributing substantially to the local economy and they represent an affluent and growing base upon which an investor could base a property investment purchase decision in Portugal and from which an investor could draw down a decent income.
2. Strong and Sustainable Tourism Demand
As stated earlier, Portugal is always among the top 20 most visited destinations in the world and it is incredibly popular in particular with Brits. Last year well over 11 million visitors travelled to Portugal and according to the World Travel and Tourism Council, tourism based growth will be in the region of at least 3% annually from now until 2017 which means anyone buying property in Portugal as a jet-to-let investment asset has a strong and developing market to rely upon.
3. Strong Demand in the Algarve
According to Knight Frank, property prices in the Algarve have doubled in the last ten years and the latest statistics have prices having increased by 6% in 2006 alone. When you compare these figures to the rest of the nation where in 2006 prices only went up by just over half a percent on average, you can see that there is strong demand in the Algarve region that is not diminishing. This is good news for anyone making a purchase because it is always important to know you can exit a market when you want to. Where there is demand you will have a base of interest to sell your property on to.
4. British Popularity
Portugal, and in particular the Algarve region of the nation has been a British favourite for years. From the UK you can get to Portugal in about two and a half hours by plane and almost a quarter of the nation’s annual tourism arrivals come from the UK. This means you can get mortgages to buy property in Portugal from British banks, the buying process is well documented for Britons and of course there is a high level of demand for rental and resale stock among Brits giving an investor or home owner their income or exit strategy.
5. Property Prices Remain Favourable
If you compare Portugal to Spain for example, you can see just how much better value Portuguese property is than Spanish real estate because whereas in Spain prices have at least doubled since 2001, in Portugal they have only risen by about 20% in the same period of time – the prices in Portugal are steadily and sustainably appreciating meaning they are affordable today and likely to offer decent capital growth over the medium term.
6. Portugal is Easily and Affordably Accessible
easyJet, Ryanair, Flyglobespan and Jet2.com fly regular cheap flights into Portugal from the UK meaning it is easy and cheap to get to Portuguese property once its purchased and it is also easier for any potential holiday tenants to fly in and access your rental real estate in Portugal.
7. Portugal is Politically Stable
Portugal’s first majority elected government since 1974 took power in 2005 and have been working hard to bring reforms to the nation ever since. They have made concerted efforts to improve the economy and also to improve the general conditions for the population and they have been accepted internationally speaking as a strong and intelligent political force. This is good news for a property investor or anyone considering committing to a property purchase in Portugal as it means they can relax and have faith in the government at the helm of the country.
8. Attractive for FDI
Portugal is one of the most attractive nations for foreign direct investment in the whole world as it has the lowest corporation tax in Western Europe and it also has policies in place to attract foreign direct investment to the nation such as offering attractive financing to grants and additional tax breaks. As a result the nation received well over USD 7 billion in FDI last year and this benefits anyone else who invests in the country, particularly those who invest in real estate.
9. High Level of Investment into Infrastructure Projects
The government is literally pouring billions of Euros into the development of national and international train links and into the expansion of the country’s main airports and this of course makes accessing the country even easier for more people which will in turn increase tourism traffic and also business in flow which is good news for anyone thinking about investing in Portuguese property.
10. A Decent and Robust Economy
Economic growth in Portugal has improved under the leadership of the current prime minister and currently it’s topping around 1.6%. Additionally the budget deficit is falling and thanks to EU funding and concerted local efforts, Portugal now has a decent and robust economy which bodes well for the future development of the nation and gives buyers long term faith in the country too.
