Over the next few years, the Portuguese property market is expected to experience far-reaching changes. Why? A major factor is the removal of Greater Lisbon, Porto, and much of the Algarve from the Golden Visa program in 2022, in a drive to shift investment towards Portugal’s interior, lower-density population areas.
Ahead of these changes, we talked to Hendricks Property Solutions. Experts in investment residency solutions such as the Golden Visa Government initiative, this well-regarded firm also offers real estate sourcing, negotiation, due diligence, and transaction services – acting with the buyer’s interests firmly in mind.
Continue reading for valuable insights from Hendricks.
What changes are expected in the Golden Visa residency program in 2022?
From January 1st 2022, investment in residential real estate in Greater Lisbon (including Cascais, Estoril, and Sintra) and Porto will no longer qualify for the Golden Visa. The Algarve will also be impacted, but some parts are exempt from the changes, and tourist complexes – including resorts with residences, villas, and apartments and villas – are also spared.
With most of the 10,000 Golden Visas issued over the last nine years linked to property in these investment hotspots, this amendment will have huge ramifications.
It will still be possible to obtain a Golden Visa by purchasing real estate in other areas of the country, but there are relatively few investment-grade properties that meet the requirements, and those that do, offer limited rental returns and capital growth.
Hendricks has an impressive track record locating special properties on the market under unusual circumstances. Benefiting from a longstanding and successful partnership with Passport to Portugal – a leading specialist immigration company – Hendricks provides valuable advice to investors seeking Portuguese residency – via the Golden Visa and other methods. For the past decade, Hendricks and Passport to Portugal have collaborated to establish numerous opportunities for their clients, many of whom are now permanent residents or citizens of Portugal and have more than doubled their investment.
Where do you see the Portuguese real estate market heading?
As a result of the global pandemic, we believe there will be an economic downturn, causing business closures. As support and mortgage relief comes to an end, there will inevitably be an additional impact on the property market.
On a positive note, Covid has encouraged many people with financial means to look for quality of life outside their primary country of residence, in a friendly climate. In this respect, Portugal ranks top of the list.
Furthermore, downturns can be a profitable time to buy — of course, with the appropriate caution and adequate support.
Quality real estate in first-rate locations historically rides the storm of market dips, and with professional guidance, opportunities with significant uplift potentially can be found.
What’s your advice on real estate investment for residency in Portugal?
Location, location, location
Hendricks recommends purchasing property in key locations that are likely to remain popular in the long term. With that in mind, Cascais and Estoril will continue to be prime targets – (but only until January 1st 2022, for those looking to take advantage of the Golden Visa program).
Prices are currently high in these parts of Portugal, but as the factors above come into play special circumstances will appear, allowing for favorable acquisitions which will inflate over time.
Other areas worth considering are Lisbon and Porto fringes and towns, such as Caldas de Rainha, Bombaral and Torres Vedras all within commuting distance of the capital.
Lifestyle considerations and an increasing retirement market are likely to make certain parts of the Algarve excellent targets. With one of the best climates in Europe, first-rate facilities, first rate leisure and health amenities, plus an array of world-class golf courses, higher-end quality developments and properties in the area will almost certainly increase in value.
Seek professional advice
Hendricks always recommends investors and homebuyers contact local advisors for professional guidance. Hendricks has a strong network, and acts on behalf of the buyer, evaluating all factors affecting price and future value. Hendricks clients also benefit from exclusive arrangements with new and quality developments that meet Golden Visa and retirement programs.
Properties acquired under a Golden Visa can of course be rented out short- or long-term. The pandemic continues to exert downward pressure on the rental market, but there will always be a demand for quality. As a guide, currently upscale residences can generate a 3% to 4% rate of return (ROR). As the economy rebounds, that figure is expected to increase, and most importantly, the property itself will rise in value.
Which properties do you recommend buying in 2021?
The key is to focus on quality areas. With that in mind, the upper end of the market tends to hold up well in recessions or downturns. Below are the three exciting opportunities available through Hendricks Property Solutions; each has its own perks for savvy buyers.
1. €2.7m property on a large plot in a prestigious Sintra location
This is an excellent choice for a family home, but is also a solid investment with income potential. Or, why not combine the two? The residence – just 10 minutes from Cascais – lends itself to buyers keen to run a boutique hotel in sunny Portugal. It’s also possible to live on-site, and rent a selection of rooms or self-contained units.
For those looking to make the most of the Golden Visa programme in its final few months, this is worthy of consideration.
2. Eco-friendly 3-bedroom villa in Amyra Parque
Nestled in the Algarve, this eco-aware development sits in 13 hectares, close to the sands of Praia Grande. And the residence ranks in the top 1% of Portuguese properties from an energy efficiency perspective. Using an award winning modular construction, the villa provides up to 40-50% better thermal and acoustic performance, aimed at the highest energy rating available in Portugal.
Using forward-thinking technology such as solar panels and battery packs, energy demands fall, be that for homeowners or holidaymakers. Water is also carefully managed and recycled, to lower economic and environmental costs. Overall, utility bills and your carbon footprint will be reduced at the same time.
Making the most of the natural landscape, the unobtrusive complex features botanical gardens, a butterfly park, and a permaculture farm, serving both the local community and the on-site farm to fork restaurant. Outdoor gyms, yoga decks, and a natural swimming pool are dotted about, as well as tennis and paddle courts. You’re spoilt for options.
3. Two-Bedroom apartment in the superb Scala development, Cascais
Scala enjoys one of the finest locations in Cascais, within a stone’s throw of the coast, walking distance to the Marina and downtown, yet set in spacious secluded gardens with 24-hour security.
Outdoor and indoor pools, spa, gym, underground parking and meticulously maintained gardens, Scala is undoubtedly one of the most sought-after addresses in the area. This 2-bedroom, 2 ½ bathroom apartment with a large terrace is modern, spacious and fully equipped, providing superbly comfortable living.