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