Published at: 18/09/2020 10:00 am
Despite the virus, the real estate prices are continually growing in Portugal. However, the tourists do not come, and the economy is on a dizzying slope, which means the prices will fall, at least on the short term.
The answer is clear and sound, yes. But let's take a look at the Portuguese property market in late 2020.
According to the country analysis from Global Property Guide a typical apartment buying price in the city centre (120 sq. m.) is 300,000 euros. Meanwhile, the renting rate per month is 1,578 euros.
But we have to mention the fact, that the Portuguese economy shrank by 13.9% during the spring, and it is the most significant quarterly contraction ever recorded, according to the INE (Instituto Nacional de Estatistica).
Moreover, the Portuguese economy is expected to contract by almost ten per cent this year, based on the projections of the European Commission related to the impact of the coronavirus pandemic. And it will have a severe effect on the real estate prices. Moreover, holders of the Golden Visa usually rented their properties for tourists, and the international travellers disappeared from Portugal. The tourist accommodation sector recorded only one million guests and 2.6 million night spent in July 2020; it's a decrease of -64.0% and -68.1%, respectively. Moreover, June was catastrophic, the month in which the losses were -82.4% (number of guests) and -85.5% (number of nights spent), according to the news .
The real estate bubble of Lisbon caused by the continuous inflow of tourists is fading away fast. From September the renting prices in the trendy city centre of Lisbon started to fall, even by 20-25%! Meanwhile, experts of the market are announcing that a crisis, similar to 2008 can't happen and the prices will not decrease. It's important to understand that the increasing real estate prices were one of the main reasons behind the relatively good performance of the Portuguese economy during the last decade. However, the path is clear. The tourists do not come, and the owners must use their properties as the taxes, and the bank loans must be paid. It means the Lisboners can return to their homes and retake possession of the city. And local tenants mean local prices, rents are tailored to wealthier foreigners, who do not come, until at least 2022! Portuguese property owners generally can't afford to wait until the tourism market revives.
In the meantime, the number of unemployed people in the EU Member State reached 407,302 in July; it is unemployed people enrolled in the Institute of Employment and Professional Training. It is a 37 per cent increase over the same month last year, (the difference is 110,000).
Summarising the situation of the autumn 2020, the market is ready for the bubble to burst. And as the prices started to decrease, it's the best time to start looking for a real estate to purchase, in exchange for the Portuguese resident status. Because the market must recover sooner or later in the Member State of the European Union. There is one more reason to start the application, Portuguese Embassies are issuing entry visas for Golden Visa applicants, and it allows you to enter the Schengen zone.
Due to the coronavirus, the market is also not overloaded with applicants as it happened during the last years. According to the official data, the number of applicants for the ARI (Residence Authorization for Investment) or Golden Visa decreased by 43 per cent (year-by-year comparison).
Discus Holdings' immigration experts are in Portugal to support not only your application's legal issues but to help you to find the best real estates on the market, offered by our partners. Ask for consultation here, if you want to receive up to date information!