Demand for luxury real estate among foreigners cools

Demand from overseas buyers for luxury properties in Portugal in the first quarter of the year stands at 5.8% of property enquiries, less than the 6.3% registered for the first three months of 2023 according to a study from Idealista.

The falling demand almost certainly reflects the end of the Golden Visa which was announced in February, 2023 as part of the previous government’s More Housing package and the changes to the NHR scheme according to the on-line European estate agency.

The United Kingdom is the main country for enquiries and online searches into luxury houses representing 11.9% of all international demand in Q1 of 2024. This was followed by the United States (11.2%) and Germany. (10.2%). Spain represented 9.2% and France 8.6%).

Demand for luxury houses from the United Kingdom went up by 0.8% on the same period last year, while interest from the United States fell 4%.

Demand plummeted for Faro (-17.3%), Braganza (-11.6%), Évora (-11.2%), and Lisbon (-5.2%), while Porto was also down -2.3%.

Overall, the previous government’s policy towards tax incentives for overseas property buyers meant interest had fallen to its lowest level in four years.

And continued legislative instability is showing signs of putting off overseas buyers, leading the new centre-right coalition government of Luís Montenegro to toy with the idea of revoking several ‘More Housing’ package measures, without making it clear whether or not they will resurrect the Golden Visa scheme now that Spain has cancelled its programme, and theoretically Portugal would only stand to gain.

In recent years, the appetite for overseas buyers of luxury property in Portugal has been remarkable, with three out of every 10 overseas house hunters buying properties worth €1 million or over.

But the first quarter of 2024 saw a fall in demand from overseas citizens looking to buy luxury houses for sale, now representing 22.8% of total property demand, the lowest level since the end of 2021 according to the data from Idealista/data.