The luxury real estate market in Lisbon and Cascais continues to be a good investment in 2020
In the wake of the Coronavirus pandemic and the subsequent economic aftershock, real estate investors need to be more selective and strategic with their investments in 2020.
Beyond validating a property based on its neighborhood, the quality and integrity of the construction, and the prospective market growth of a city, investors also need to analyze new variables in their decision process, such as the nation’s ability to respond to unexpected crisis situations.
In terms of public health, June 2020 data shows that the impact of Coronavirus on Portugal was significantly lower than most affected countries, especially when comparing to its Mediterranean neighbors like Italy and Spain. During the quarantine period, there were no cases of insecurity, reinforcing Portugal’s position as the 3rd safest country in the world (Global Peace Index) after Iceland and New Zealand. Portugal’s response was recognized as an example of proficient crisis management by the rest of European countries.
On a political and socioeconomic level, Portugal is one of the most stable countries int he world. All economic forecasts suggest that the economy will starting to experience growth again in 2021. A study from Knight Frank, a global reference in the international real estate market, even projects that Lisbon will be one of only four cities in the world that will continue to see prime price growth in the housing market throughout 2020.
So, even in the shadow of the Coronavirus, evidence shows that the Portuguese real estate market will continue to see sustained growth in the coming years.
Here are 7 reasons to invest in the luxury housing market in Lisbon and Cascais in 2020
1. The demand for luxury real estate (specifically, luxury apartments homes) in Lisbon and Cascais coast continues to exceed the supply.
This trend is expected to continue to grow in the coming years. Construction in this segment is anticipated to reduce in the next new few years, which will guarantee quality and price stability.
The main reason for demand to exceed supply is prices. While Lisbon and the Cascais coastline offer a superior quality of life, the cost of living is still below the international market average.
According to a survey by the real estate consultancy Cushman & Wakefield (C&W), international investors and investment funds intend to invest around 7 Billion euros in commercial real estate in Portugal in the coming months. This is a clear sign that the prospects for economic growth are very positive.
2. The Portuguese Government has already confirmed that the Golden Visa program and the Non-Habitual Residence (NHR) Tax regime will remain active in 2020.
Through the Golden Visa Program, a foreign citizen can obtain a residence permit for themselves and their family. To qualify, one must investment in job creation or residential property at a value equal or greater to 500,000 Euros.
The Gold Visa program has attracted residents from all over the world, and it has created an ideal ecosystem for the creation of joint ventures and new businesses. Lisbon and Cascais have become hotspots for foreigners looking to relocate to Europe, creating a very cosmopolitan society. Common expat groups include individuals from China, Brazil, United States of America, South Africa, Turkey and Hong Kong.
The Non-Habitual Residency (NHR) Tax Regime is designed to offer tax benefits for individuals from other Schengen countries who do not require a visa to relocate. It mainly attracts French and English citizens looking to reside in Portugal, however since there is no minimum stay requirement, many individuals invest in Portuguese real estate simply to take advantage of this program’s benefits. Among these include the possibility of tax exemption on all foreign earned income and a 20% flat tax rate on Portuguese income sources.
In May 2020, in the middle of the Covid-19 pandemic, applications for residence permits through the Gold Visa tripled. Golden Visa applications were up by 270 compared to May of 2019, representing a potential investment of 147 million euros in luxury residential real estate. Due to the geopolitical climate in Asia and insecurity in South America, it is estimated that the number of foreign citizens who will move to Portugal will continue to increase.
3. Lisbon is a European hub for business with Africa, Brazil and Asia. Plus, it only a 2 to 3-hour journey from most main European capitals.
Portugal has a 500-year long relationship with Africa and Brazil, and 450 years of history with China and Japan. Lisbon is the cultural and business bridge between all these cultures.
It has been the chosen location for many start-ups to establish their operational and technological base. Lisbon's bustling business culture has also attracted many entrepreneurs to relocate to Portugal. Several of the world’s biggest business and technological conferences take place in Lisbon, the Web Summit being the most well-known.
4. Lisbon is the European capital with the most days of sun per year.
Mild winters and tepid summers invite Portuguese residents to spend days near the sea and enjoy dinners al fresco. Due to the climate, Lisbon is frequently sought after by residents of northern Europe looking to relocate during the winter months.
Penthouse view from Avencas Ocean View Residences.Learn more here.
5. The last decade has shown that luxury real estate in Lisbon and Cascais is highly resistant to economic crises.
In 2008, the Subprime crisis spread to Europe until 2012 as a public debt crisis. The post-Troika was critical in initiating what has come to be a continued and substantial increase in real estate prices in prime neighborhoods of central Lisbon and the Cascais coastline.
Even during this period, demand continued to exceed supply, keeping prices up, particularly in the luxury segment. Despite the pandemic situation, prices have remained stable. The market has remained dynamic and liquid.
6. Education and universities in Lisbon and Cascais are among the best in Europe.
Lisbon has many schools, from day care to university level, with international education. The children of expats who live in Portugal can maintain the education of their parents’ native country. Lisbon and Cascais in particular have a wide offering of schools with fully Anglo-Saxon education (English, or American). There are schools that focus on other European languages, such as French, German, or Spanish education.
For education in Portuguese, Lisbon and Cascais are home to many prestigious schools that adhere to the highest international standards for curriculum.
In terms of higher education, the University of Lisbon, Universidade Nova, and Universidade Católica are among the best international universities. In fact, the Nova School of Business and Economics has a new campus situated right along the Cascais coastline that is specifically focused on international Bachelors, Masters, and Doctoral programs.
7. Lisbon is one of the most cosmopolitan European capitals today, with a contemporary Mediterranean lifestyle. This quality of life is transversal to the various economic segments.
According to Monocle’s 2019 Quality of Life Survey, Lisbon ranks number 10 among the 25 best cities in the world to live.
Lisbon offers the cultural elements of urban city living, and the outdoor activities of a beachside community.
Residence of Lisbon and Cascais enjoy a varied cultural offer, with events every day of the week. There are always 1001 things to do, discover and experience.
Enjoying time outdoors is integral to the Portuguese way of life, and in any corner of the city, you’ll always find an outdoor café, rooftop, or terrace to participate in this shared cultural experience. Residents also get to spend plenty of time surrounded by the natural wonders of Portugal- from the city’s numerous parks and greenspaces, to the pristine beaches of the Cascais coastline and the mystical mountains of Sintra.
All of these factors create an attractive backdrop for the luxury housing market in Lisbon and Cascais. The diversification of new residents ensures that this market will maintain its sustainable and resilient growth and stay resistant to price fluctuations, even during times of crisis.
MEXTO Property Investment has a well proven track record of identifying, designing, and developing spaces for comfortable, elegant living in premium locations. To learn more about investment opportunities, contact our Customer Care team.
