Property in Portugal - A Good Investment?

Published: 9th September 2013

As with so many countries, the market for property investment in Portugal is predominantly focused around an exceptionally strong tourist market. With over 12.3 million visitors last year, Portugal is in fact one of Europe's most popular tourist destinations, with visitors attracted to the stunning beaches and an exceptional golf courses which litter the coastline of this beautiful part of the Iberian Peninsula.

These revenues from tourism, coupled with numerous EU development grants following their recent EU membership has allowed the Portuguese authorities to undertake a gradual upgrading of their infrastructure. In particular, improvements to the road and rail networks have seen increased access to the more remote areas, which would previously not been considered by major developers.

This focus on the beach resort / golf resort market, has meant that the vast majority of investment property in Portugal purchased by investors has been in the Algarve region. More recently however there is a trend away from these traditional investment havens, towards new resorts further afield such as the Silver Coast near Lisbon, and the Green Coast located near Porto.

The investment market for property in Portugal is certainly not an emerging market, as tourists from the UK and Europe have been purchasing second home property in Portugal for over 20 years. This process has been a more gradual and organic one, in contrast to the explosive growth levels seen in places such as Spain a decade ago. However this has allowed Portugal to learn from the experiences of places such as Spain, and government initiatives such as density restriction have shown they Portugal intends the problems experienced elsewhere.

Portugal is not an emerging market, and investors seeking the opportunities for a short term gain should look elsewhere. However the market for property in Portugal does cater for those investors seeking long term gains, and today investors are experiencing returns in the region of 10% in Portugal.

The market here does still represent a good opportunity for property investors, and despite the increase in the cost of living following EU membership, the property in Portugal is still well priced in comparison with other major European tourist destinations. These factors, coupled with the improved accessibility through increased cheap flights into the region have meant that Portugal caters well for a specific segment of the property investment market.

More information on tourism in Portugal is available at the official Portugal Tourist Board website.

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