The Residential Sector will Lead Global Real Estate Investment
According to results from several studies published worldwide in recent weeks, by 2030, one-third of all global direct investment in real estate will occur within the residential sector, rising from 25% in 2020 and 14% in 2010. Growth in the residential sector is based on capital flows, as well as favourable market conditions as a result of the current demographic situation, economic situation and the low-interest rate policy, or even negative, as for example in Germany. These are all factors that will drive expansion in established markets and will also accelerate growth in emerging or secondary markets, such as Portugal. Residential investment will rival traditional commercial real estate asset classes, including offices, over the next decade as capital allocations change and portfolios become more diversified. This increase in capital flows is mainly concentrated in the conventional multifamily or build-to-rent segments, as investors increasingly recognise the favourable return profile, growth opportunities and rental fundamentals offered by these specific residential assets. In 2020 alone, the "Pandemic year", approximately $200 billion was invested globally in the residential sector by international investors, and it is anticipated that investor appetite will increase significantly. The cash-flow stability and operational resilience of the residential sector, particularly through cycles and periods of economic uncertainty, are recognised by investors and developers and as such, investors and developers will stay and expand beyond the established institutional markets. Investors are watching the consistency of their investment returns in the residential sector, and this performance may well challenge the office sector's investment position. In the previous economic cycle, annual growth in investment volumes reached 17%, significantly higher than in office and retail. It is of utmost importance for all players in this segment to keep the following considerations in mind: there is a housing shortage in every country, supply does not cover demand and thus it is a monumental challenge for many markets. On the other hand, it is a simple rule of the market: where there is demand and lack of supply, the product will always have a buyer and prices will not go down, but up. New challenges such as migration and changing ways of living and population movement are a key consideration in housing demand. Influenced by the pandemic, many residents have moved from small units in the urban core to spacious accommodation in the suburbs. Long-term trends, however, continue to favour urban conglomerates within cities. In the past, it was mostly the younger generations who looked for rental housing. Today this is no longer the case due to lack of purchasing power among other factors, meaning renting is the principal option for an increasing number of people. Millennials will be complemented by the comparatively large z-generation, underlining sustained medium and long term growth opportunities. Access to housing is increasingly difficult as it is not matched by the evolution of wages and productivity, rising raw material costs and skilled labour. This makes it increasingly unaffordable for a majority of the world's population to buy their own homes and therefore to rent. National laws, taxes and regulations have a brutal impact on the real estate market and in particular on the residential segment. If there is no profit, you can't buy or rent, if there is no security in the collection of the rent, there will be no investment or purchase of the property, if there is no legal security for landlords, they will rather sell than rent. Creating housing is therefore an issue that should be treated with the utmost political sensitivity, and there are very good examples of this worldwide and in Europe. Take, for example, the case of Germany, where private individuals who create housing space for third parties do not pay rent tax and thus manage to maintain rental pri
Web Summit Returned to Lisbon Last Week and Portugal is Back on the Global Stage
On November 1st, Web Summit opened its doors for its 2021 conference in Lisbon. After being held online in 2020, this year’s in-person event was highly anticipated both by its attendees and speakers and the city of Lisbon. Over 42 000 attendees participated in this year’s Web Summit, coming from 128 different countries. There were over 1333 talks across several different stages by 748 speakers, which covered topics such as sustainability, technological advancements, artificial intelligence, healthcare, human rights, and increasing access to technology and education. The event welcomed 1519 startups from various industries, and 872 investors looking to connect with relevant start-ups. After much uncertainty surrounding the event, it was a relief when opening night finally commenced on the 1st of November. Health and safety measures were strictly followed throughout the event, with masks being mandatory inside the venue and negative covid tests or vaccine certificates being required for entry. Women in Tech For the first time in the event’s history, the number of tickets assigned to women was higher than the number assigned to men. There has been significant effort from the event to get more women participating in the event and helping more women entrepreneurs and developers to be represented at the highest levels of tech remains one of the primary goals of the conference’s organisers. The Main Themes of Web Summit 2021 Whilst this year's two main talking points were cryptocurrency and climate change, there was a strong emphasis placed upon the increasing use of artificial intelligence and advances in virtual and augmented reality technology. The role of advancements in virtual reality will have a direct impact on the real estate sector, especially in the area of marketing, remote viewings and renovations. The increasing digitisation of real estate investments and of all aspects of real estate transactions was also evident at the event, where several companies present were focused on helping investors digitise their real estate assets and real estate companies bring their business online, in a more seamless fashion. Web Summit and Portugal’s Startup Scene Web Summit is a hugely important event for the Portuguese economy and each event is thought to generate €300 million through increased income from hotels, restaurants, local accommodation, investment in startups, and 250 Web Summit jobs. It also helps place Portugal and Portuguese companies on a global stage, and encourages investment in Portuguese startups. The startup scene in Portugal has been growing in recent years, particularly the tech startup scene. There is a growing number of startup communities across the country, especially in Porto and Lisbon. Portugal has a high number of science and technology graduates, the majority of which speak English fluently. Property prices are competitive in Lisbon, compared to other European capitals, meaning that it’s often a more affordable option for both residential and office property. The growing startup scene in Portugal is still in its infancy but is unlikely to slow down in the coming years. Portugal consistently ranks highly in terms of innovation, startup culture, as well as for the lifestyle it offers those that make the move here. The number of digital nomads and startup companies making the move to Portugal is also on the rise. It will be interesting to see how things develop over the next few years, and what the stages of Web Summit will hold in 2022.
Foreign Purchases Double in the Housing Sector in Less Than Ten Years
In 2020, international investors were responsible for 11% of all house purchases made in Portugal, representing a growth of 200% since 2012, in the residential segment of the national market. In Lisbon, this increase was even more notable and homes purchased by foreigners tripled during this period, this was also seen in Porto. These figures, regarding the acquisition of property by foreigners, have been taken from the most recent statistical data from the National Statistics Institute (INE). Portugal has once again been honoured with several of the most important International Tourism Awards, and as such is in the international news for its quality of life, its people and its climate. These factors too will have contributed to this increased demand. Throughout this period, i.e. the decade after the 2010 financial crisis, the main nationalities that have invested, and continue to invest, in Portugal have changed. In 2012, the British led foreign investments, accounting for 23% of all purchases, followed by the French, Germans, Swiss and Angolans. In 2019, the French became the leading international investors in the Portuguese housing market, accounting for 18% of purchases made by foreigners, followed by the British, Brazilians, Germans and Chinese. This is also partly due to the large participation of the second and third-generation French Luso-descendants, with French nationality, who contributed to this shift in published statistics. This trend will certainly continue, especially due to the insecurity that exists in markets that compete with Portugal in this segment. In regards to politics and governance, this situation is presented in the opposite light. Foreigners who read newspapers and watch the news and are confronted with a lot of uncertainty, and a left-wing political game, which doesn’t favour investment and capital. In Portugal, there are changes in fiscal and labour policies every year, which can send a bad signal to capital and investment. It’s an issue that is already showing signs of influencing the decisions of some investors in segments parallel to housing, such as retail, logistics, offices and industry. It is of the utmost importance for a country such as Portugal, which relies on tourism and exports, that labour laws and fiscal policy be maintained for a minimum period of one legislature, and not constantly changed to benefit past political ideologies. This is the only way to guarantee a better future and interest for international and national investment in our country.
The Number of British Citizens Residing in Portugal Surged by 34.6% Between 2019 and 2020
According to the annual Immigration, Borders and Asylum report published earlier this year by the Portuguese Immigration and Borders Service (SEF), the number of British citizens that obtained residence in Portugal between 2019 and 2020 jumped up by 34.6%. The driving factor for this increase of course being Brexit. The number of Britons applying for residence in Portugal has been steadily on the increase ever since the outcome of the referendum held on the 23rd June 2016 was announced. The year-long transition period in 2020 meant it was the final year that Britons could obtain residence by registering at their local town hall, without needing to apply for a residence visa first. Whilst Brexit is likely the predominant factor for the increased number of Britons residing in Portugal over the past few years, the number of foreign citizens from across the globe choosing to reside in Portugal has also increased overall over the past five years, suggesting there are other important factors also at play. Non-Habitual Resident Tax Scheme (NHR) The NHR tax scheme has been a big draw for foreign citizens from across the world. Under the NHR regime, Portuguese sourced income from certain high-added-value activities can benefit from a reduced personal income tax (PIT) rate of 20%. Foreign sourced pensions are taxed at a reduced rate of 10% and foreign sourced income may be exempt from taxation in Portugal, if it meets certain requirements and is taxed in the source country. Those who become tax resident in Portugal, who haven’t been tax resident in Portugal in the previous five years, are able to apply for NHR status. Once approved, NHR status can be held for 10 years, granting a significant period of time in which those under the scheme can enjoy its benefits. It is important to work with a good accountant who understands the NHR regime, especially for those who have not solely living off a pension, to ensure that you can benefit from NHR status where applicable. Freedom of movement With Portuguese residency, you are able to travel across the 26 European countries in the Schengen zone freely, without the need for a visa. This freedom of movement is a huge pull for non-EU citizens. Lifestyle Portugal consistently ranks as one of the top countries for expats to move to. The lifestyle in Portugal, relatively low cost of living and its pleasant year-round climate are other important factors influencing the increase in the number of foreign citizens choosing to reside here. Portugal has stood out in terms of its performance in measures of rights, freedoms and guarantees and for being considered an inclusive country. It’s ranked consistently as a safe and friendly country to live in. For nature lovers, Portugal is a wonderful place to be, with a variety of different landscapes including natural parks and nature reserves, mountains, rivers, vineyards as well as a wonderful 800km of coastline. Moving to Portugal Post Brexit It is still possible, and relatively easy, to move to Portugal after Brexit. The main change in the process is that you need to apply for a residence visa in your home country beforehand, and then book an appointment with SEF once you arrive in Portugal, to obtain your residence permit. There are a few different visas you can apply for and the best one for you depends on your situation. The most popular visas are the D7, D2 and Golden Visa. The Golden Visa comes with a number of benefits including its low physical presence requirements and that the holder is granted residence without needing to become a tax resident in Portugal. The changes coming in 2022 to the Golden Visa scheme will affect many of those who want to obtain residence by investing in real estate in Lisbon, Porto and the Algarve. There is still time to obtain the Golden Visa by property investment in these areas, but you’ll need to act fast to get all the paperwork submitted before the end of 2021. Click here to read out more about the golden visa and browse our range of properties here.
Post-Pandemic Real Estate in Portugal has begun!
Portugal has managed the pandemic in exceptional form during the past months, resulting in 87% of the Population being fully vaccinated by the end of the first week of October, hitting a world record. This has contributed to a reduction in the decline of activity as a result of the pandemic, and will give Portugal’s economy a boost compared to other economies in Europe regarding the coming winter, and a potential 4th wave of Covid in some of the more developed countries in Europe and across the world. The expected growth is about 3.9% in 2021, and will climb up to 5.1% in 2022. The economic indicators have improved remarkably, with the Banco de Portugal’s daily economic indicator growing by 7%. Portuguese real estate has been the most resistant industry to the pandemic, as despite the issues faced it has never come to a standstill and has shown a rapid capacity to adapt on both in terms of supply and demand. Demand remains the same, and whilst transaction volume is still below pre-pandemic figures, the reason for this is that ongoing projects have proven great resilience, and currently there is a renewed growing demand from various places including the international real estate market seeking to buy residential property in Portugal. Investments in ongoing projects are greater than ever before in the real estate sector in Portugal. Of course, the discipline shown by the Portuguese population in the face of the pandemic, Brexit and the changes to the Golden Visa investment program, has also led to a boost in foreign interest in seeking residence in Portugal. Portugal has demonstrated it can fulfil all of the conditions to be one of the top destinations to invest in residential real estate assets now, and in the future. Portuguese real estate developers have now started to adapt and redesign their projects to attend to the new trends of habits and preferences. In any case, the Portuguese real estate market is going to become more dynamic with the recovery of sectors such as tourism and hospitality, where the pandemic had a strong impact. 2022 will show a significant turning point for the Portuguese real estate market, as it will recover to a similar level of the record years of 2018 and 2019 before Covid-19. From the investor’s point of view, private investments are expected to benefit from the excellent conditions of the real estate market in Portugal, and I expect that domestic and foreign investments will continue to grow in 2022 like they did in the beginning of 2020, a year in which we saw the best quarter ever in Portuguese Real Estate Transactions. I consider that in the next few months, thanks to the current health situation in Portugal, we will have a greater demand than ever before for second homes across Portugal. This demand will also not be limited to the Algarve, Lisbon, or Porto, as the outskirts and central regions of Portugal are growing in demand thanks to the prices and space, and a change in customer priorities and lifestyle preferences. Author: Paulo Lopes
How the Listing Photos and Videos You Use Can Make or Break a Sale
Humans are visual creatures. We process visual information at an alarming speed and make a judgement on that information almost just as quickly. The use of the right images has an impressive effect on online marketing, across all platforms. The use of images and videos, and the quality of photography and videography are essential when selling a property. Images capture attention far quicker than text does and receive far more engagement and listings with high quality photos and videos are clicked on more than those without, or those with poorer visual presentation. The world is moving more and more online and as such, the digital presentation of your property is truly essential in attracting buyers and getting the property sold quickly and for the best price possible. Importance of Visual Marketing in Real estate Buyer habits have evolved massively over the past few years. The vast majority of buyers use the internet when searching for a property and make many decisions about a property from online listings, before they even consider contacting an estate agent or agency. The restrictions over the past year and a half have only accelerated the digitalisation of the real estate industry. More people have been relying on online resources to gather information about properties, and in turn use this information to make decisions about which properties to visit and sometimes even purchase. If a property is presented poorly digitally, then the likelihood of people choosing to make the effort to visit the property will be greatly reduced. The amount of time people spend looking at listings, the click through rate and number of enquiries all decrease when listings contain poor quality visuals. Online listings that contain a large number of high quality photos of the interior and exterior of the property more than often sell faster than those that don’t. Properties with better digital presentation can sometimes even sell for a higher price than those without, likely due to the fact more interest is generated for properties with better online listings. Even if your property is perfect for someone, if that isn’t being portrayed in your online listing then it will be hard to convince them of this, and get them to take the time to visit in person. A lot of important information about the property can be portrayed through photography, which may be the deciding factor for buyers to book an in person visit. High Quality Photos Make a Huge Difference First and foremost, image quality is of utmost importance. Poor quality images, with bad lighting, that only show small sections of the rooms, not only fail to accurately portray the property, but can even paint a negative image of the property. Using photos with poor lighting makes it difficult for buyers to truly see what the property looks like, and can make rooms seem darker and smaller than they actually are. Blurry photos will also more than likely put prospective buyers off and can show a lack of care on the part of the agency and/ or owner. With poor quality photos it can be difficult for potential buyers to properly visualise the property increasing the likelihood that it will be eliminated as a choice by buyers, in favour of a home that is better represented online. It goes without saying that it is also essential to make sure photos are up to date, and the property is accurately represented in the photos taken. Not only will the image quality often be far poorer in older photos, but it’s likely changes will have been made to the property or area since the older photos were taken. The Number of Photos Matters The number of images included in listings is also important. Too few photos of a property online is a common complaint from those searching for properties, and many will automatically disregard a listing that doesn’t contain enough photos. Many feel that if only a few photos of a property are published, it means that there is something in the property that the owners do not want to show, even if this is not the case. You want to show as much of the property as you can in your photos, of all areas of property including the outside. The more photos the listing contains, the more visual information the prospective buyer has and the more likely they are to enquire for further information and arrange a visit. Growing Importance of Video Video is becoming a more and more important tool in real estate marketing. More people are not only looking for listings with video tours but they are also more likely to enquire further about properties with videos in the listings. For obvious reasons, buyers trust video more than they do photos. They get a better idea of what the property is like and whether it is worth visiting in person. The clients you attract with a well put together video will often be more likely to be interested in purchasing the property as they already have a good idea of what the property is like. Video content tends to capture people’s attention and for longer periods of time than photo. You can also portray far more information about the property using video than you can with just photos, making it easier for buyers looking for properties to know if it’s the property that will suit their needs. This is one of the probable reasons that videos are so good at converting clients. How We Can Help At Casaiberia, ensuring that all the properties within our portfolio have a large number of high quality images in the listings is a huge priority. Not only do we make sure the equipment we have to capture photos is up to date to ensure the photo quality is optimal, but we also take into consideration the camera position, angles and lighting, both natural and artificial. All of these factors are important in real estate photography. A lot of time is spent planning photography sessions to ensure the final results are optimal, and that image quality across the photos is consistent. We spend time making sure the property’s features are properly highlighted and make sure to take images that portray a lot of the information that buyers are looking for (outside space, views, features, parking etc.), and capture buyers’ attention. Videos are also included for most properties. The videos show the interior of the property and drones are used to capture footage of the exterior. These are edited to show the property off as well as possible. As well as high quality photos and videos, we make sure all accompanying information and details are laid out clearly to complete the online listing. Making sure that properties are presented well online is so critical and will only become more so as digital platforms develop. Online listings are the first impression many buyers will have of your property and so you want to make sure that first impression is as good and memorable as possible. If you are interested in knowing more about our services and working with us then don’t hesitate to get in touch.
Web Summit Returns to Lisbon in November
One of the world’s top technology conferences, Web Summit, will return to Lisbon this November. Last year the entire event took place online, but earlier this month organisers were given the green light to have the event take place in person and over 40,000 people are expected to attend across the four days. Web Summit's History in Lisbon Web Summit has been running since 2009 and first came to Lisbon in 2016. After two years of taking place in Lisbon, it was decided the Portuguese capital would host the event annually until 2028. Web Summit has been highly beneficial to the city and has helped bring Portuguese tech companies to a global stage. The last time it was held physically in Lisbon in 2019, over 300 million euros in revenue for the city thanks to the 100,000 visitors that came for the conference. More Than 1000 Confirmed Speakers So Far Among this year's speakers is comedian and actress Amy Poehler. Amy will be speaking about the community she has built up through her organisation and YouTube channel, Amy Poehler’s Smart Girls. Her organisation aims to help women through life’s problems by sharing insights and past experiences from women, in a light and comedic manner. Other speakers include Prime Minister António Costa, Microsoft president Brad Smith, European Commissioner Margrethe Vestager and footballer Gerard Pique. Leaders from online companies such as Reddit, Amazon and Tinder are also in the line-up of speakers. As well as over 1000 speakers, more than 1500 journalists and 700 investors are also expected to attend. The return of Web Summit this year as an in person event is an important step forward after over a year of restrictions. Safety measures will still be put in place, although the exact nature of these has not yet been decided. Lisbon’s Growing Tech Scene Lisbon being selected as the host city of important tech conferences, including Web Summit, shows how important the city is, and will remain, in terms of business and technology. Over half of graduates between 20-30 years of age in Lisbon are STEM (science, technology, engineering, and mathematics) graduates, largely thanks to the fantastic science and technology education faculties in and around the city. Beyond just the capital, there are over forty courses with a focus on technology across the country's top universities and the number of graduates coming from such universities is increasing. Portugal also boasts the second highest rate of engineering graduates in Europe. The large amount of tech and engineering talent in Portugal’s large cities continues to attract a large number of foreign companies, which has, in turn, led to a development and diversification of talent in the country. Lisbon is One of the Best Cities for Startups The number of startups in Lisbon, particularly those in the technology sector, continues to grow. As we have already touched on, there is a large amount of tech talent in the city. Salaries in Portugal are lower than in similar European cities making such talent far more affordable for startups. There is an ever increasing number of startup and entrepreneurial communities across Portugal but particularly in Lisbon, with a large importance placed on networking and events like Web Summit. The Portuguese government has put into place several measures and schemes to help support startups and entrepreneurs across the country. Not only are there a large number of STEM graduates, but English is very widely spoken in Portugal, making it far easier for international companies and foreign investors to undertake business in Portugal and aiding in communication with international companies. A Rising Number of Remote Workers Thanks to the great climate, vibrant culture, and fiscal benefits for new tax residents, Portugal is attracting more and more talented online workers, or digital nomads, to the country. This increase in remote workers has diversified the talent across the country, and many remote workers who spend long periods of time in the country chose to become residents in Portugal. Lisbon has several co-working spaces specifically designed for those working remotely. Many digital nomads have skills in areas that Portugal as a country is slightly behind in, primarily in online marketing and sales, and often have a good deal of experience helping online businesses. Beyond Just Technology Lisbon not only has a fantastic talent pool and an array of opportunities but also scores highly in terms of quality of life. The city has a high safety rating, rich culture, and large international community, all whilst remaining reasonably affordable compared to similar European cities. Together, all these reasons have made Lisbon particularly attractive for new businesses and investors and why interest in Lisbon, especially in its startup and tech scene, will continue to grow.
Exploring the Village of Burgau
Nestled in the cliffs between Lagos and Sagres, on the edge of the South West Alentejo and Vicentine Coast Natural Park, you’ll find the picturesque village of Burgau. Burgau was voted the quaintest seaside village in Europe and has been described as the “Santorini of Portugal”. Walking through the narrow, cobbled streets, it’s easy to see how it picked up this reputation. The way the whitewashed, fishermen's houses with their blue doors and colourful hanging flower baskets look against the clear blue skies of southern Portugal, makes it truly feel like you’ve stumbled into a hidden oasis. Burgau used to source most of its income from fishing but now primarily focuses on tourism. Despite becoming a popular tourist destination, huge efforts have been made to maintain the traditional look and quaint atmosphere of Burgau. Restrictions put in place have meant that the village has escaped from many of the large tourist developments seen in some of the other cities and towns along the Algarve coast. Praia de Burgau Praia de Burgau marks the start of the Vicentina coast and is one of the village’s main attractions. You’ll know you’re getting close when you spot the colourful fishing boats pulled up on the surrounding streets. If you’re up early enough, you might even see some local fishermen returning in them with their catch of the day. Burgau beach has a wide stretch of soft sand and calm, clear waters. The surrounding cliffs shelter the area from the northerly winds, making it a perfect spot to sunbathe and swim. There is a popular beach bar where you can enjoy a drink and something to eat with a wonderful view of the Atlantic ocean. Make sure to check the tide tables before you visit if you do want to walk down onto the beach, as at high tide it almost completely disappears. For surfing, you can head to the west side of the beach. The waves in Burgau are often very mellow, which makes it a great spot for beginners. Once Autumn comes around the waves get bigger and are better for more experienced surfers. The further west you go along the coast towards Sagres, the better spots for surfing and watersports you’ll find. Hiking Trails One of the best ways to explore the village and its surroundings is by foot. From Burgau you can follow several walking trails along the coast; the most popular are those west towards Salema and beyond, and east towards Luz and Lagos. The trails are suitable for all levels of fitness and offer some spectacular views across the Algarve coast and the rustic countryside of southern Portugal. Burgau Village In Burgau itself, you can wander the pretty village streets and gaze over the landscape from one of its viewpoints. There are a few bakeries, food stores and souvenir shops where you can pick up supplies in the village, with bigger shops being available in nearby Luz and Lagos. There are plenty of great cafes, bars and restaurants in Burgau. In the summer, as the number of visitors increases, the centre can get pretty busy so make sure to get to your favourite spot early, or book ahead. Some popular spots are Café do Burgau, where you’ll find a fresh, healthy menu in a relaxed atmosphere. Caffé Bombordo is another favourite, tucked away in the back streets of Burgau. Just up from the beach you’ll find Miam Burgau and Restaurante Ancora, both of which are very popular and have great sea views. For after dinner, A Prateleira bar has a large terrace and often has live music during the summer. Bar One is another popular spot for those who live in and visit Burgau, with a wide selection of drinks and food on offer. Local Amenities The village also has a sports centre where you can play tennis, squash and football as well as partaking in various fitness activities. The centre also has a swimming pool and a terrace where you can sit down and relax, and enjoy something from the onsite café. For those looking to move to the area with children, it’s worthwhile knowing that Burgau is home to the Vale Verde international school for children between the ages of 5-18. It follows the British curriculum but is a bilingual, Portuguese/ English school. It’s one of the leading private, international schools in the area and is a great option if you are coming with children. Whilst only small, Burgau is full of charm and spirit. Many people choose to reside here and in the surrounding area full time. You’ll find many of the services and amenities you need either in the village of Burgau, or close by in Lagos or Luz. Burgau is only an hour’s drive from Faro and just under three hours from Lisbon. Have a watch of our video on Burgau and our latest project there here Feeling Drawn to Burgau? Make sure to take a look at one of the latest projects in Burgau. This condominium will be situated just a few minutes from Praia do Burgau and consist of two bedroom apartments, all of which will have private outdoor space and access to a communal swimming pool as well as private parking and storage. These apartments will provide the ideal base to enjoy the beautiful town of Burgau in comfort and style. For a place that’s ready to buy and move into, this two bedroom apartment just outside the centre of Burgau in a wonderful rural setting is perfect. This two bedroom apartment is also situated in the same condominium.
Five Things to Consider Before Buying a Rural Property in Portugal
Last week we spoke about how interest in villas and rural properties had increased since the beginning of the pandemic. It’s clear that the events of the past year have led to a shift in buyers’ priorities, and larger properties, outside of cities, with more outdoor space are becoming more sought after. When the pandemic restrictions came into force, more people started to see the immense benefits of living further outside of cities and having outdoor space, both in terms of their properties and surrounding areas. As restrictions continued, we got more and more used to the idea of working from home and developed new routines that didn’t involve long commutes, through busy cities to the office. The appreciation for more outdoor space and being able to go out and roam around the countryside became far more valuable than being in the centre of a city. These memories won’t fade quickly and the fear of further lockdowns will linger for a while. Thinking About Buying In the Countryside? There are always things to look out for and consider when buying property, whether it’s a city apartment, a seaside villa or a countryside property. There are certain factors you need to be particularly aware of however if you’re thinking of buying a rural property, especially as an international buyer who may not have much local knowledge. Here’s a list of six of the top things to consider when buying a rural property. Define Why You Want a Countryside Property Really think about why you want to buy a rural property and what you want from your home and lifestyle. Do you have your heart set on a particular location? Do you want somewhere with lots of land? Are you looking to renovate or do you only want somewhere that’s ready to move into? Not only will this help you in your search for a property, but will also help you define what you absolutely won’t compromise on, and likewise which things you would be willing to forego if necessary to make a purchase within your budget. Get the Right Advice Having a good team of people to help with your purchase is crucial. To start with, make sure you are working with an agent who has good reviews and is happy to invest time in helping you with your search. Hiring a lawyer is absolutely essential if you’re looking at purchasing a rural property. You want to work with someone who is trustworthy and who has plenty of experience in the purchase of rural properties. Paperwork is so important in Portugal and you need to make sure everything is in order. Many who look into buying property in the country encounter problems with property deeds. Before you make an offer, you need to see the original property deeds and this must be thoroughly checked by a lawyer. Without the deeds, it could make selling the property impossible and someone else may even be able to claim legal ownership of the property, even after you’ve purchased. If the seller is not able to obtain the deeds, then any offer you make must be conditional to them obtaining them. To warn you, this can be a lengthy process.A lawyer can also help verify that everything is legal, and alert you to any potential issues you may encounter. It’s a good idea to discuss any plans you have for the property with a lawyer and/or architect, to make sure that they will be possible. You want to speak with someone who understands local planning regulations and can find out information quickly for you. Budget More Than You Think You Need This is especially true if you are renovating. No matter how well you plan, there are always extra costs that come up, be that for materials, labour or to fix problems that hadn’t been budgeted for. With older houses, the likelihood of unexpected problems appearing is much higher. Make sure you are connected to all utilities and if you’re not, make sure that you are able to do so. Running water, electricity and reliable internet aren’t always a given, so make sure to double-check which utilities you need to get sorted, and how much you’ll need to spend on doing so.You don’t want to run the risk of running out of money halfway through a project and not be able to finish or sell. Visit Properties in Person With the pandemic, more and more people are opting for virtual house tours and are signing documents remotely. In many cases, this works fine but for rural properties it’s very much recommended you visit in person. It can be much harder to gage if a rural property is right for you through a video tour, than it is with a city apartment. Visiting in person will allow you to properly look around the property or land, and get a feel for the area. It’s a good idea to visit a few different properties to give you a chance to compare your options. If you are doing any work on the property then make sure to visit the site regularly or have someone do so on your behalf, to check that everything is running according to your timeline and work is being carried out properly. Scout Out Your Local Amenities Figure out where your nearest amenities are; local markets and supermarkets, medical centres, petrol stations, and transport hubs. Whilst the idea of being completely in the middle of nowhere might be appealing to some, it is always a good idea to know where to go to pick up essentials and where you need to head to get medical assistance. It’s far better to know where you need to go and how far you need to travel for this before you buy, or think about putting in an offer. Whether you’re purchasing an apartment or a country house, there are always things to consider before buying. With proper planning and consideration and help from the right group of people, the buying process will be smoother and any potential problems will be easier to spot and deal with. Once you find a suitable property, you’ll not only have a wonderful place to spend your time in a peaceful setting but could also gain a fantastic investment. The demand for rural properties is unlikely to slow down, especially for those that have been refurbished and finished to a high standard.
Demand for Villas and Rural Properties on the Rise in Portugal
Over the past year, the demand for villas and housing outside of town and city centres has risen significantly. According to idealista.com, between April 2020 and April 2021 villas made up 37% of the total number of property purchases in mainland Portugal, up from 33% the previous year. This means that 4 out of 10 of all properties purchased during the pandemic were villas, a rise of which hadn’t been seen before the onset of the pandemic It’s thought the increased demand for such properties has been influenced by the lifestyle changes and priority shifts seen during the pandemic. More buyers are searching for properties away from busier cities and towns and instead, looking towards more rural areas. The Influence of a Rise in Remote Working The pandemic saw an increase in the number of people working remotely, a trend that is likely to continue for a significant proportion of workers. This increase in remote working as well as the rise in those who own digital businesses, has meant that living close to a city in order to commute is no longer such a high priority, allowing those who have wanted to move to more rural and quieter locations to do so. The increased location flexibility as a result of the rise in remote working has also opened an opportunity for those who have wanted to spend more time abroad or move permanently. Portugal has seen a rise in interest from buyers working remotely for companies in the USA and UK, leading to an interesting development in the international client market. The continued efforts to improve the digital infrastructure across Portugal will help attract buyers to more remote areas of Portugal. A lot has been invested into ensuring high-speed internet is available across the country. This, together with benefits like the low cost of living and good year-round climate, has attracted an increasing number of digital nomads to Portugal in the past few years. Demand Still Far Outweighs Supply An increase in activity was seen in the real estate market after pandemic restrictions eased, mostly due to pent-up demand and a continued increase in enquiries. Construction activity also recovered after declining in the first quarter of 2020, helping boost the number of properties available on the market, especially in urban areas. Whilst city apartments still make up a large percentage of the properties bought in Portugal, it’s clear that consumer behaviour is shifting. Properties in more rural settings, that are closer to nature with lower population density are factors that a growing number of people are prioritising. The number of villas and detached properties available for sale in Portugal is still not sufficient to meet the rising demand. It’s predicted that demand for such properties will continue to remain high, if not increase over the coming months. More space, both indoors and outdoors and quieter locations are increasingly in demand and as such properties that offer these benefits, especially in places with good digital infrastructure, will continue to be in demand as well. Looking for property in Portugal? Check out our portfolio or get in touch with us to let us know what you're looking for.
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