Buying property in the Portuguese cities
< Back
Articles on Portugal
According to Paul Houston of Lucas Fox, there's been a lot more tourism lately in Lisbon, which signifies to him that the city is on the up. Improvements to roads and the transport network, a new airport at Ota (scheduled for completion in 2017) and redevelopment of the capital's historic buildings shows a faith that hasn't been seen for some time. Yet prices are still below what you would pay for similar property for sale in Barcelona or property for sale in Madrid.
"For something nice in Lisbon average property prices are around €3,000 [£2,030] per square metre," says Houston, "though you can pay up to €5,000 [£3,385] or as low as €2,000 [£1,355] depending on the location and quality of apartment." Houston says that what you'll get is lots of character properties often in good states of repair. Average apartment sizes are around 90 square metres and he says it's still possible to find properties with stunning views.
For investors, Houston advises that locations good for rentals are Castello, Baixa, or Rossio but he also points to the Barrio Alto (old town). "All of these suit tourists as they are within walking distance of the city."
If you do plan to rent Houston says you can either do it the Portuguese way and charge by the night, making a return of around €80 (£55) per night on a two-bedroom property, or you can let it on a longer-term basis for around €1,000 (£680) per month.
Long-term letting is less common but one- or two-year contracts are the norm, though Houston says if the expat market is your goal you'd be better off looking at the coastal suburbs of Estoril or Cascais, around half an hour from the city, where families prefer to live.
Currently, Lucas Fox has a lot of well-priced apartments, with one-bedroom places starting at €167,000 (£113,000) right up to two- or three-bedroom residences in restored palaces for €350,000 (£237,000) plus. For around €250,000 (£169,000) you get a good selection of attractive and well-refurbished apartments that offer easy access to the cafes, restaurants and historic attractions of the city and several have nice views over rooftops or to the river.
The reason Lisbon is so affordable by capital city standards is that the Portuguese market in many areas has been quite flat over the past few years, with appreciation of only around five per cent. However, Houston is "expecting it to go up" as people become priced out of other countries.
Connie Vitto of Quadrant Property agrees that Lisbon is a place to watch. She's adept at finding property at the value-end of the market as well as those in pricier bands and says she has access to refurbished apartments in Lisbon from €90,000 (£60,900). They may only be large studios or one-bedroom apartments measuring around 50 square metres but if all you're looking for is somewhere to lay your head they could be perfect.
"Lisbon is fabulous," says Vitto. "It's small enough to get around easily and has improved transport links, you can eat well, it's good value compared to London and they really know how to party."
Vitto also deals in Porto, though she says currently there isn't as much demand for it as other towns. The city is an attractive working port, further north than the capital. It tends to have worse weather but is attracting people who see it as cheap compared to other locations. Paul Houston says Lucas Fox is also looking to expand there in future, as there's a big programme of regeneration there and he expects long-term prospects to improve.
Vitto adds that Porto does offer "fantastic value" and that you can get property at significantly lower prices than elsewhere. Agents dealing more fully in the city, such as Grupo Prime, offer homes starting at €137,000 (£92,700) for a one-bedroom apartment ranging to just over €300,000 (£203,000) for four bedrooms.
Around 30 minutes train ride south of Lisbon is the magical town of Sintra, another crown in Portugal's city jewels. Sintra's eclectic architecture, hilltop location and pretty streets make it popular with tourists but it can be hard to find property. You need access to the local market to know what's for sale - and a lot of money to be able to afford it - or you could buy in the countryside outside the town.
Connie Vitto is often able to locate property in the surrounding area at far lower prices. She says it's possible to buy "little palaces" from around €2.4 million (£1.62 million) up to at least €8 million (£5.4 million) but there are also detached villas in the area for around €500,000 (£338,000) or cottages at around the €250,000 (£169,000) mark. She currently has a property with two bedrooms and lovely views for €280,000 (£189,000) and a selection of villas priced from €450,000 (£305,000) up to over €1 million (£677,000).
Also in Sintra is a one-off property being sold through Aylesford International for Û6.5 million (£4.4 million). It is pricey but is an exceptional property: a large grand palace with a fabulous rambling garden. Called Quinta da Princesa it is also typical of the type of large, ornate residence Sintra is known for. Aylesford International's Alison Macpherson thinks it would make a fabulous boutique hotel.
"When you mention Sintra to people who know it their eyes light up," says Macpherson, "but they ask you not to tell anyone about it." Though she says this need to keep it a secret carries into the property market as well. "In Sintra, houses rarely come up for sale and change hands quickly when they do."
Macpherson also sees Lisbon as being somewhere that is starting to rise with the inevitable ripple effect. "From what I've seen, the Lisbon market is very buoyant right now with a lot of foreign investment. People seem to be investing in buy-to-let and this will have a knock-on effect in terms of Estoril, Cascais and Sintra."
Macpherson thinks the city still has some way to go to clean up its act but is getting there and that the historic buildings, lively ambience, great food and lifestyle more than make up for the city's neglect. "There's a move towards the gentrification of Lisbon, with areas being cleaned up and the restoration of beautiful old buildings."
If you're more attracted to the south coast but want to stay away from the Algarve's beaches there's plenty of urban life to be found in historic Lagos. With it's pretty beaches, walled city and attractive marina it attracts plenty of tourists and investors without feeling too invaded.
"Central Lagos is protected and most of the development is outside the city," says Connie Vitto, "but is hasn't spoilt the area." She says that Lagos was a small town until the new motorway brought Faro airport within easy reach, but now it has the ability to be one of the major cities on the Algarve.
Property prices here aren't yet as astronomical as other beachfront areas though, with two-bedroom apartments regularly available for around the €200,000 (£135,000) mark, it isn't difficult to find one-bedroom places for much lower. Vitto says you also get more for your money. "I can't emphasise enough the size and quality of property compared to elsewhere." Good quality, property is available through Vitto from under €100,000 (£67,600) and she also has small villas from €250,000 (£169,000). "If you had €350,000 [£237,000] plus to spend that would get you something pretty nice," she adds, explaining that in this area of Portugal, like many other locations in this lovely country, you'll pay "a realistic price for a good product."
Read our other articles about buying property in Portugal:
as well as our overseas news stories affecting the property market in Portugal, the Homes Overseas Guide to Buying Property in Portugal or view our range of property for sale in Portugal.
First published in Homes Overseas Magazine June 2007.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
