Quality housing is rising in price
For the Russian buyer, accustomed to Spain, Portugal still remains something exotic. But Ukrainians have recognized all the advantages of this country at the very edge of Europe.
Therefore, it is no coincidence that among others we turned to Victoria Berezka, director of an agency operating both in the Ukrainian real estate market and in the Portuguese real estate market. According to her information, for some properties – large-format apartments, apartments in central areas – there is a steady rapid price increase, so resale a few months after purchase can bring some profit. But for tiny apartments (like our Khrushchev-era apartments) – prices do not grow at all.
According to Victoria, price growth occurs only in the top segments of the Portuguese real estate market – the more expensive the property, the higher the annual price increase. On average, experts note an annual price growth of real estate in Portugal of 12-15%.
Lisbon: entry threshold – €75 thousand
According to Luís Figus, owner of the agency Apartamentos para Vender, the most acceptable city for living is considered the capital of the country - the city of Ližboa (Lisboa), traditionally called Lisbon in our country. Prices for apartments in this city of half a million start from €75 thousand. Judging by the sales listings we studied while preparing this material, the seller does not seem to care how many square meters the apartment being sold has. Thus, for €100 thousand, sometimes a 67-square-meter two-bedroom and a 130-square-meter four-bedroom are sold. The evaluation criteria are difficult to explain, and one can assume that the seller in the Portuguese real estate market is in a difficult position, while the buyer is in charge.
Selling an apartment is much more difficult than buying one. From the outside, it seems that the Portuguese themselves almost never buy apartments – they live in the house where they were born, and for centuries pass it on to their descendants. However, the matter is probably not so much an age-old habit as the low income level of the Portuguese – their average salary is only €1,473. This is one of the lowest indicators in Western Europe.
On bulletin boards you can find apartments selling for €200 thousand and €320 thousand, but more than €150 thousand cannot be foisted on either shrewd Englishmen, thrifty Danes, or poor Ukrainians for a Lisbon apartment, unless, of course, it is located directly on Rua Augusta.
In general, the most expensive district of the Portuguese capital is considered Baixa Pombalina. It contains the aforementioned streets and all the main attractions of Lisbon, including Torre de Belém – the Bethlehem Tower – a castle on an island in the middle of the Tagus River, built in 1515-1521 in honor of Vasco da Gama's discovery of the sea route to India.
Buying an apartment can be recouped by renting it out. If an average 110-square-meter apartment in Lisbon is rented on a permanent basis, the rent will bring the owner from €750 to €900 per month. In this case, the apartment will pay for itself in about 15 years. With daily rental, tourists are charged €130 per day, and per month, thus, it comes out to €3,900. It turns out that an apartment that cost €75 thousand will pay for itself in just over three years.
Porto: cheap rent attracts migrant workers
The second most important city of Portugal is traditionally considered the 240-thousand Porto, which once gave its name to the country. Porto is the center of the historical province of Douro Litoral, which once formed the core of the country. The city is considered the northern capital of Portugal. In addition, it is the most industrially developed city of Portugal. The old part of the city with narrow steep streets is built up with granite houses, often decorated with tiles. One of the main attractions is the Baroque church of São Pedro dos Clérigos with a lighthouse bell tower, built in 1732-1763.
The sale price of local real estate is only slightly lower than Lisbon, but rent is almost twice as cheap. Renting a two-bedroom apartment in Porto can be done for €450 per month and €63 per day. However, for Ukrainians going there to work, the cheap rent in Porto is only beneficial - there is much more work there than in Lisbon. Buying real estate in this city among people from CIS countries is not popular yet.
Province: business on historical monuments
In Portugal, you can easily buy an old stone house near the sea, built back in the time of the Great Geographical Discoveries, when both the French and the English shied away from ships with Portuguese flags. On average, such a house, with a facade clad in porcelain stoneware, costs €50 thousand, but you can also find offers for €15-20 thousand. However, the best days of these buildings have passed along with the former glory of Portugal, and buying such a house, you will encounter the problem of a leaking roof, clogged chimney, and rusty plumbing.
If the cottage is located near the waters of the Atlantic Ocean, the same Englishmen will be happy to spend their fortnight there. And given their love for foreign vacation, you can not only recoup the cost of this cottage but also earn money to buy the next one by renting it out in season for €100 per day.
Madeira: zone of expensive real estate
The most expensive Portuguese houses are on the island of Madeira, but this is already resort real estate, and there - different prices.
Since the 19th century, Madeira has become a recognized European resort. Not just a resort, but a place of elite relaxation - for kings and billionaires. Apartments on Madeira cost the same as in Lisbon – €95-130 thousand. As for prices of "moradias," as private houses are called on Madeira, they start from €150 thousand and average €450 thousand. There are, of course, multi-million dollar specimens, but they are rarely put up for sale.
Don't forget about taxes
If you buy a home for investment purposes or for vacations and you are in Portugal for less than 183 days a year, you cannot be considered a permanent resident of that country. In this case, Portuguese laws require you to appoint someone from among local residents as your tax representative. This representative will receive any information from the tax authorities.
Who you choose as your tax representative is indifferent to the authorities. The best option is a management company, but such companies exist only in the capital, in Porto, and on Madeira. Your representative could be your Portuguese friend or a hired lawyer. The property tax is about 1% of the value of the home.
The purchase process is divided into two stages: preliminary and sale and purchase. The preliminary contract reserves the property for the buyer and confirms the intention to conclude the actual sale and purchase contract in the future. It is concluded between the seller and the buyer in the presence of a lawyer. After signing the preliminary contract, the seller no longer has the right to offer their property to anyone else, and the buyer is obliged, within a certain period specified in the contract, to deposit a down payment of 25% of the value into the seller's account.
Just as in our country, if the buyer backs out, they lose the deposit, and if the seller changes their mind, they return the deposit in double. The tax on the purchase of real estate is from 2% to 8%.
Despite the stagnation in the economy, Europeans still show some interest in Portuguese real estate. And the rate of price growth for housing here is twice as high as in neighboring Spain. Does this mean Portugal will "overtake and surpass" its neighbor? Oddly enough, the main complaint voiced by investors is poor infrastructure. However, this can be improved. It can be assumed that the number of private investors will reach a certain critical mass, and more serious investments will come to the country. Then the infrastructure will improve.