International Property Report Sheds Light on Portugal's Burgeoning Luxury Real Estate Market

Portugal's luxury real estate market is experiencing continued growth, with buyers specifically interested in the Algarve, Lisbon, surrounding areas, and Porto.

This is according to the latest independent international real estate market research report from Property Market-Index, which provides an in-depth look at Portugal's most desirable locations for affluent buyers and investors.

The report, titled "Portugal's Property Hotspots Report 2024-2025", also underlines how Portugal's cultural richness, heritage, high-quality new home specifications, and favourable tax incentives are fuelling a significant boom in the nation's luxury property sector.

Property Market-Index also found that prime real estate locations in Portugal are seeing strong demand, particularly in regions like the Algarve, Lisbon and Porto.

The below locations were ranked as property hotspots in the latest report based on their capital growth potential, cultural and educational offerings, heritage, robust investment opportunities, land availability, infrastructure, connectivity, amenities, health and well-being, sustainability, safety and security:

1. Quinta do Lago, Algarve
2. Vale do Lobo, Algarve
3. Ferragudo/Carvoeiro, Algarve
4. Lagos, Algarve
5. Estoril, near Lisbon
6. Comporta, near Lisbon
7. Lisbon districts: Liberdade, Lapa, and Principe Real
8. Cascais, near Lisbon
9. Silver Coast
10. Sintra, near Lisbon
11. Foz do Douro, near Porto
12. Vilamoura, Algarve

Speaking about the report, Amanda Collison, Senior Researcher and spokesperson for Property Market-Index, said:

"The Algarve's luxury real estate market is thriving. The continuous influx of entrepreneurs and wealthy families is driving investor confidence, with quality building projects now matching and even surpassing international standards in some areas.

"Across Portugal, we are witnessing property values growing at double the rate compared to the UK, EU, and North America. This trend will likely continue for at least three years due to the persistent imbalance between international demand and limited supply in the luxury segment."

Paul Stannard, Founder of Portugal Pathways, commented: "The new government in Portugal has expressed a clear commitment to increasing housing availability for locals, though this will take time to realize fully. Meanwhile, the luxury real estate market, driven by international expats across the country, is expected to continue driving property values upward.

"This recent report from Property Market-Index identifies which locations in Portugal are primed for the luxury real estate market or delivering considerable value, with areas such as central Algarve locations like Ferragudo, Carvoeiro, and Benagil, as well as the capital city Lisbon and its surrounding areas, Porto and the Silver Coast."

Demand for Luxury Living and Property in Portugal

The report highlights the ongoing need for additional housing, both in terms of starter homes and luxury developments aimed at international buyers. Last year, there were just over 20,000 new properties built compared to 200,000 a decade or so ago.

This scarcity, coupled with heightened demand, has accelerated the top-end real estate values in Portugal, outstripping the GDV of many international property markets in recent years. According to the report, this trend is set to continue.

Portugal's attractive tax regimes are also a significant draw for wealthy expats, even with the changes that will come in early 2025 for new entrants.

The Non-Habitual Residency (NHR) tax incentives offered substantial tax savings on non-Portugal-derived passive income for ten years, and over 75,000 international expats had taken advantage of this since 2009, when it was introduced.

But even with the transition to the new NHR 2.0 tax regime in 2025, Portugal will continue to attract high-net-worth individuals with the right professional qualifications to qualify for the new scheme, driving inward investment and entrepreneurs whilst bringing new talent and innovation to Portugal.

Real Estate Opportunities across Portugal

British expat Sarah Thompson shares her positive experience: "The real estate opportunities here in the last two years have been surprising, both in terms of the quality of architecture and the stunning locations. Coupled with the quality of life, I've never regretted moving here."

One luxury developer, Brookes Property Group, is launching their Quinta Heights luxury new homes development between Carvoeiro and Ferragudo in the central Algarve this summer and is seeing significant demand for its project.

Phillip Button, Managing Director of Brookes Property Group, said, "We're just launching, and we've already sold 25% off-plan. The demand in central Algarve is incredibly high due to its rich cultural experiences and luxury developments like Quinta Heights, which offers tremendous value compared to similar properties in the Golden Triangle, just 30 to 40 minutes away.

"The beaches and bays in Ferragudo and Carvoeiro offer stunning sea views alongside breath-taking mountain vistas. Quinta Heights will feature top-tier specifications and amenities, including wellness and yoga spa facilities, garden walks, and even an observatory for stargazing."

"Having built international luxury real estate for over 20 years, originally in Florida, we are incredibly excited about the opportunities emerging in the Algarve. Unsurprisingly, the region is attracting so many affluent international families."

Anne Brightman, founder of Brightman Group, a luxury boutique real estate agency, shares her insights on Lisbon and its surroundings:

"Lisbon's districts like Liberdade, Lapa, and Principe Real are thriving due to their unique blend of historical charm and modern amenities. Cascais and Sintra offer stunning beauty and strong investment potential, while Estoril and Comporta are gaining popularity for their luxurious coastal living. These regions succeed because they combine lifestyle, accessibility, and high-quality real estate."

If you would like Portugal Pathways to help you with any research for luxury real estate in Portugal in any of these property hotspots, please contact us to arrange a meeting with one of our real estate specialists here.

For more detailed insights into the latest property hotspots in Portugal, you can access the full Property Market-Index report here.

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To arrange a call with one of our Portugal Pathways real estate experts and find out more about new developments, contact us today.

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