Portuguese economy earns €7 for every €1 of overseas investment
Every euro invested by overseas buyers in residential property in Portugal generates €7 in the Portuguese economy for the next five years.
This is according to a recent study from the Portuguese Association of Resorts (APR) and based on 2019 numbers from the National Statistics Institute, Eurostat and the OECD which looked at the direct, indirect and induced impacts on the economy from buying a property.
Pedro Fontaínas, president of the APR says that the “impact of buying property is around seven times more than the upfront investment in Portugal over five years for each new resident, be they overseas citizens or Portuguese returnees”.
Therefore an investment of €3.4 million made by new residents in Portugal in 2019 will generate an on-the-ground impact of €21 million by the end of 2023 states the report.
“This number stresses the extraordinary importance that this overseas investment in residential property brings to the State, companies and in terms of Portugal’s competitiveness,” said Pedro Fontaínhas.
In the current competitive environment which is even sharper now because of the need for economies to recover after the pandemic, our geographical, weather and social attributes and the quality of our property are not enough,” he added.
“We have to reverse our increasingly less attractive legal and bureaucratic and fiscal situation and make Portugal attractive to those who seek to live, work, bring up children and retire,” he adds.
In 2019 the Algarve represented 38% of the value of this investment and 27% in terms of quantity of property. Lisbon has a 36% share of the investment and 21% in quantity, while the central region of Portugal represents 23% of all properties transacted.
According to the study, in terms of revenues, the main buyers are from France, the UK, Brazil, Germany, China, Spain and the Netherlands.
In terms of average home investments, these are taken by China, Brazil and the United Kingdom. The UK is the main buyer of premium properties transacted with amount over €500,000.
When it comes to annual spending by overseas families in Portugal, the French are the biggest spenders followed by the British and Germans.
Pedro Fontaínhas highlights the “extraordinary impact” that the Golden Visa has had on investment, with data showing from the immigration and border authority SEF that €584.6 million worth of property each worth over €500,000 were purchased on the back of the Golden Visa scheme.
“This amount which is important for the residential real estate sector represents less than 2.5 per 1000 of the total number of urban property transacted that same year. Given this disproportion, arguments from certain quarters against Golden Visas that they distort or inflate the housing market and take houses away from the Portuguese are just not acceptable,” said the APR president.