Overseas investment in Portugal real estate €1.1Bn
In the third quarter of 2023 overseas investors invested over €1.1Bn in Portugal’s real estate sector according to data from the Bank of Portugal .
And in the first nine months of the year investment in commercial real estate topped €1.050Bn which, nevertheless, was a fall of 50% like-for-like in 2022 according to the latest market analysis from real estate consultants JLL.
DFI data published over the weekend by the central bank also shows that the value of international transfers from overseas investors for the entire sector to September stands at €3Bn.
It represents a new record since the bank started publishing data on overseas real estate investment in 2008, and is +26 up on the same period in 2022.
And the record investment in property has taken place against a backdrop of an unstable geopolitical situation overseas, a tightening up on financial restrictions and a slowdown in the Euro Zone’s housing market. (Except in Portugal where prices are holding steady)
Even more surprising is that houses are selling like hotcakes despite Portugal terminating the NHR tax regime at the end of the year, and the end of the Golden Visa regime property option at the start of this year.
But given that the ‘More Housing’ package came into force in October, it did not have an effect on September transfers from overseas to buy property, although there have been some estate agents in the sector reporting some potential investors changing their mind about Portugal.
However, FDI in Portuguese real estate has not only beat all records for the first three quarters of 2023, but represented almost two-thirds of the total FDI in Portugal for January to September.
That said, the total volume of FDI attracted by Portugal (including all other areas, not just real estate) has been falling.
To September, Portugal attracted €4.6Bn of new FDI – a fall of 12% like-for-like. It was the lowest figure seen since the start of the pandemic in early 2020.
To September, the total stock of FDI in Portugal reached €175.9Bn with 90% or €157.2Bn coming from 20 countries: Spain (€26.8Bn), France (€17.3Bn), UK (€13.3Bn), and China (€12.5Bn). However, top of the list was Portugal because of the round tripping phenomena whereby the initial investment begins in Portugal and ends in Portugal because of intermediate entities resident in other countries.