Berkshire Hathaway Spotlight on Lisbon
Lisbon, the vibrant capital of Portugal, is experiencing a unique phase in its real estate market. Despite a significant drop in sales and ongoing political uncertainties, the city’s property prices continue to rise, driven by low inventory and sustained demand. This insight comes from a recent spotlight report by Berkshire Hathaway HomeServices, which sheds light on the current state and future prospects of Lisbon’s housing market.
Market Dynamics
According to Michael Vincent, CEO and President of Berkshire Hathaway HomeServices Portugal Property, Lisbon saw a 25% decrease in property sales this year. This downturn is attributed to several political factors, including debates over the potential discontinuation of the non-habitual tax regime and the phasing out of the real estate Golden Visa program. Despite these challenges, obtaining a Golden Visa remains possible in 2024, offering a glimmer of stability to prospective investors.
The sudden resignation of Portugal’s prime minister further compounded the market’s uncertainty, leaving investors cautious but still engaged due to the city’s enduring appeal.
Inventory Shortages and Price Increases
A critical issue facing Lisbon’s real estate market is a stark shortage of homes. “We’re looking at a shortage of 300,000 homes,” Vincent highlighted, pointing out the sluggish pace of construction that fails to meet the rising demand. This scarcity has kept property prices on an upward trajectory, with a year-over-year increase of more than 10% compared to 2022.
Cesar Santos, broker of record at Berkshire Hathaway HomeServices Atlantic Portugal, noted that the price per square meter in Lisbon now rivals that of major global capitals, averaging €4,800 but soaring up to €10,000 in more sought-after areas.
Buyer Preferences and Demographics
The report also touches on the characteristics that buyers are prioritizing. Modern, energy-efficient homes with high-quality construction and sustainable materials top the list, especially in prime locations like Lisbon and Cascais. The city’s appeal is bolstered by its excellent weather, robust healthcare system, low crime rates, and picturesque coastline, making it a favored retirement destination.
In 2023, 40% of the buyers were Americans, particularly from New York and California, followed by individuals from France and the UK. The market sees a balanced mix of those purchasing holiday homes and others settling down permanently in Portugal.
Looking Ahead
Despite the optimistic buyer activity, 2024 is anticipated to be a challenging year. Market uncertainties related to global conflicts, fluctuating interest rates, and inflation are expected to slightly decelerate housing price increases. However, Vincent remains positive about Portugal’s position, considering it a preferred destination for many.
Conclusion
Lisbon’s property market is navigating through a period of both challenges and opportunities. With its enduring appeal and strategic importance, the city continues to attract a diverse array of international buyers. For those interested in delving deeper into the nuances of this market, the full report from Berkshire Hathaway HomeServices offers extensive insights and forecasts.
For more detailed information, click here to read the full report.