Lisbon, Portugal’s coastal capital, has become one of Europe’s smartest cities and a prime opportunity for overseas property investors. Stacey Rohwer, an IP Global Investment Manager, recently took the time to explain the changes she has seen in Lisbon and what is attracting investors to the city.
From your perspective, what makes Lisbon a unique city?
Lisbon is simultaneously one of the oldest and youngest cities in Europe. Portugal as a whole was heavily affected by the 2008 Recession and has had to rebuild significantly. We are seeing Lisbon grow in very new and exciting ways. The city’s rich history offers a perfect foundation for its forward-thinking culture and creativity to build upon. We are currently witnessing the city move toward becoming one of the most significant international hubs for innovation.
How is the city evolving?
Lisbon has always been the political and economic capital of Portugal, but it is now also positioning itself as a creative hub; we’re seeing a steady evolution of the city into an exciting destination that fosters the exchange of new ideas. Many local and international talents enjoy the city’s low rents and this younger community is actively revitalising previously neglected buildings and turning them into innovative and cultural endeavours, especially in the city’s tech sector. The increasing popularity of the city’s start-up ecosystem is best shown through the success of one of the world’s largest technology conferences, Web Summit, which moved to the city in 2016.
What regeneration projects are currently underway in Lisbon?
Currently, the city is going through several infrastructure regeneration initiatives, such as a metro network expansion project. Lisbon airport will also be expanded and a new civil airport in Montijo will be built, as well. Such projects will ease growing congestion, caused by the city’s economic growth and tourism boom. Additionally, the city will be going through an urban renewal where public amenities and spaces will be improved and aligned with smart city innovations.
What type of people want to live in or move to Lisbon right now?
Students and young professionals! Lisbon has a world-class pool of universities and talent, while also offering very low costs of living. The city does afford the perfect living environment for competitive and exceptional talent. A range of government initiatives has seen significant migration to the country, as well.
Are there restrictions for foreigners looking to buy property in Lisbon?
There are no restrictions for foreigners looking to buy property in Lisbon; in fact, the government has created schemes that encourage foreign investors to look at the city, such as the Golden Visa Programme and the Non-Habitual Residents Initiative. Once granted, members of these schemes will have easy access to investment opportunities in the city.
Is there a demand for residential properties in Lisbon?
Yes, there is an increasing demand for residential properties. It’s also worth noting that 50% of the country’s total housing demand is centred in its two biggest cities, Lisbon and Porto. Lisbon has suffered from a chronic undersupply in the market for quite some time and only in recent years have we seen the construction activity pick up. This is only making a dent in the city’s supply needs though.
What is the future of the Lisbon property market and is there a bubble?
Lisbon is a safe place for domestic and foreign investment. Following the financial crisis, the city’s property market is showing healthy signs of recovery and in the context of high liquidity and low interest rates the property market is emerging as a high return investment in the current and near future. Lisbon’s property growth is backed by strong fundamentals, government initiatives, a severe lack of supply and a growing population. There is no evidence to suggest the growth in the market is a bubble or unsustainable. In fact, Lisbon has been named the number 1 destination for investment in PwC’s 2019 Emerging Trends in European Real Estate report.
What advice would you give to those who want to invest in Lisbon?
Because of the variety of investment opportunities that Lisbon offers, the city’s potential is highly compelling and profitable. We of course always recommend interested parties conduct their own research into a property market before they invest. We are more than happy to provide our clients with one-on-one consultations to discuss the process of investing in Portugal, including mortgage applications, recommended solicitors, Golden Visas, Lettings and Managements and more. You can request your free consultation here.