Reading time: 3 min.
Crowdestate presents investors a new market: Portugal.
The Portugal real estate market has been growing for several consecutive years since the subprime crisis. Measures like the Golden Visa brought a significant impact, especially in Lisbon, Porto, and Algarve regions, adding 5,2 billion euros in real estate investment since October 2012.
Following the 2,5% expansion in 2019, the Portuguese GDP registered a 7,6% downfall in 2020 because of Covid-19 impact. According to the Bank of Portugal, a 3,9% growth is expected in 2021, followed by 5,2% in 2022.
Despite the profound consequences of Covid-19, the housing price index rose 8,4% in 2020, representing a lower rate of price growth than the one observed in 2019 (9,6%). The average annual price for the existing dwellings (8,7%) surpassed new homes (7,4%).
For the first time since 2012, there was a decrease in the number of residential transactions. In 2020, 171 800 dwellings were transacted, which was 5,3% less than 2019, but in value terms, the overall housing value transacted increased 2,4% compared to 2019, totaling 26,2 billion euros. The value of new dwelling transactions increased by 9.3% to 5.4 billion euros, and that of existing dwellings rose by 0.7% to 20.8 billion euros.
In 2020, the most significant part of residential deals was in the North and Centre of Portugal, concentrating 48,7% of the total number of transactions. The Lisbon Metropolitan Area stood at 33,5% but represented 45,4% of the total value of transactions, while the North and Centre of Portugal accounted for 37,3% of the total value.
Overview of other real estate sectors, as per the Cushman & Wakefield proprietary database in 2020:
- The office market had a year-on-year contraction of 29%, but the average deal size increased to 1310€/sqm, an increase from the 1110€/sqm registered in 2019;
- In the retail market, 430 deals with 135.600 sqm were registered, representing a year-on-year decrease of 50%;
- In 2020, the industrial and logistics market more than doubled the amounts recorded in 2019 (+111% year-on-year), accounting for almost 340.000 sqm, with Greater Lisbon recording 136.000 sqm and Greater Porto 107.000 sqm;
- Retail was the most active sector, considering the largest deal ever recorded in the country – Sierra Portfolio of 800M€ – took the most significant part of the 1115M€ transacted in 2020.
Portugal started exiting the second general lockdown in April, which will still affect the economic figures of the second semester of 2021. This will keep a conservative outlook for the year. Still, nevertheless the activity in the real estate sector is expected to exceed growth expectations.
As the moratorium on the repayment of loans will be finishing from the 4th quarter of 2021, we can expect an impact on the housing market. The predicted job losses and changes in people’s private consumption, will most likely lead to some opportunities for investment not only in Greater Lisbon and Porto areas, but also in other cities like Algarve, where we can foresee a possible future recovery of the tourism sector.
By investing in Portugal through Crowdestate, you will be investing in the 3rd safest country in Europe, the best country in Europe for expats, and one of the best travel destinations in Europe.
Simão Cruz will be in charge of Crowdestate’s activities in Portugal. Simão has more than 15 years of experience in financial management directly and is indirectly related with construction and real estate, both locally and internationally. He will be focusing on creating value to Crowdestate’s investors by getting the best investment projects in the Portuguese market.