In 2024, Lisbon secured €3 billion in housing investments, with 70% from local investors. Explore the dynamics of Portugal’s real estate market.
As the sun sets over the picturesque streets of Lisbon, the city is not just a feast for the eyes but also a hotbed for real estate investment. In 2024, Lisbon has once again solidified its status as a prime destination for housing investments, with a staggering total of approximately €3.057 billion. This remarkable figure marks a 38% increase from the previous year, showcasing the Portuguese capital’s growing allure for both national and international investors. Notably, Portuguese investors accounted for a significant 70% of this investment, reflecting a shift in the market dynamics that could reshape the future of real estate in the region.
The Surge in National Investment
A New Era for Portuguese Investors
In 2024, the profile of investors in Lisbon’s real estate market underwent a significant transformation. While international demand remains robust, it was the Portuguese investors who took the lead, driving the market with a remarkable investment surge from €1.305 billion to €2.150 billion. This 65% increase not only sets a new record but also underscores the confidence of local buyers in the stability of the economic landscape.
The favorable economic conditions, characterized by falling interest rates and a gradual control of inflation, have played a crucial role in this investment boom. With 4,324 houses acquired by national buyers, representing 73% of transactions in the Urban Rehabilitation Area (ARU) of Lisbon, it is evident that the Portuguese are seizing the opportunity to invest in their own capital.
The Urban Rehabilitation Area (ARU)
The Urban Rehabilitation Area encompasses nearly all parishes in Lisbon, excluding Parque das Nações, Lumiar, and Santa Clara. This area has become a focal point for investment, attracting both local and foreign buyers eager to capitalize on the city’s revitalization efforts. The ARU’s appeal lies in its blend of historical charm and modern amenities, making it an attractive option for those looking to invest in residential properties.
The Stability of Foreign Investment
A Consistent International Presence
Despite the impressive growth in national investment, foreign investment in Lisbon has remained stable at around €900 million for the third consecutive year. This consistency, with figures hovering around €910 million in 2022, €912 million in 2023, and €906 million in 2024, indicates that international interest in Lisbon’s real estate market is far from waning. The slight 1% decrease in foreign investment can be attributed to the absence of incentives such as golden visas, yet the allure of Lisbon continues to draw investors from around the globe.
A Diverse Pool of International Investors
In 2024, a total of 1,575 dwellings were acquired by foreign buyers from 74 different nationalities. Leading the charge were French investors, who contributed €149 million to the purchase of 206 properties. They were closely followed by American investors, who invested €142 million in 197 homes. Notably, Brazilian investors returned to the top ranks, securing third place with €101 million invested in 158 houses, a position they had not held since 2019.
Other notable contributors included British investors, who spent €80 million on 133 homes, Germans with €45 million for 98 properties, and Chinese investors, who rounded out the top six with €36 million for 86 homes. This diversification of international investment highlights the global appeal of Lisbon’s real estate market.
Analyzing Investment Trends by Parish
Concentration of International Investment
An analysis of investment trends by parish reveals that more than half of the international investment was concentrated in five key areas: Santo António, Estrela, São Vicente, Misericórdia, and Arroios. Among these, São Vicente experienced remarkable growth, with investments soaring by over 200% compared to 2023, totaling €104 million. Similarly, Misericórdia recorded a significant increase of 39%, reaching €100 million.
Conversely, some parishes experienced a decline in investment. Santo António saw a 26% drop to €112 million, Estrela recorded a 30% decrease to €108 million, and Arroios suffered a 28% reduction, totaling €82 million. However, the eastern axis of the city, particularly the parishes of Beato and Marvila, witnessed a notable increase in international investment, raising nearly €30 million—doubling the amount from the previous year.
Average Transaction Values
The average value per transaction has also shown an interesting trend. In 2024, Portuguese buyers spent an average of €497,000 per property, marking a 21% increase from 2023. Meanwhile, foreign buyers maintained a stable average of €575,000. The narrowing gap between the two groups is noteworthy; in 2023, Portuguese buyers spent, on average, 40% less than their foreign counterparts, but this difference has now shrunk to just 16%.
The Lisbon’s real estate market is entering a new phase characterized by a blend of national and international investment. The substantial growth in Portuguese investment, coupled with stable foreign interest, suggests a maturing market that is becoming increasingly dynamic and sustainable. As the city continues to recover economically and attract diverse capital, Lisbon remains a highly attractive destination for real estate investment.
With its rich history, vibrant culture, and strategic location, Lisbon is poised to maintain its status as one of Europe’s most desirable cities for residential property investment. As we look ahead, the combination of local confidence and international allure will undoubtedly shape the future of real estate in this enchanting capital. Whether you are a seasoned investor or a first-time buyer, the opportunities in Lisbon’s real estate market are ripe for the taking.
