What are Top Real Estate Hotspots in Portugal for Foreign Buyer?

Discover why Lisbon, Porto, and Faro attract over 50% of non-resident loans in Portugal real estate market. Explore these thriving hotspots now!

Portugal has emerged as a prime destination for international property buyers, particularly in its vibrant cities of Lisbon, Porto, and Faro. Recent data reveals that these three locations account for over 50% of housing loan requests made by non-residents. This trend is particularly pronounced among buyers from the United Kingdom, Switzerland, and France, who have shown a significant interest in buying real estate in Portugal during the second quarter of this year.

What are Top Hotspots in Portugal for Foreign Buyer?

A Surge in Housing Loan Requests

According to the quarterly report from idealista/créditohabitação, the period between April and June saw non-residents applying for housing loans with an average value of €171,541, marking a 15.8% increase compared to the same period last year. The average price of the properties these buyers are interested in stands at €214,784, reflecting a 4.5% rise.

Interestingly, families seeking credit have reported an average income of €5,522, which is 8.4% higher than the previous year. Moreover, these families are requesting a higher percentage of financing from banks, averaging 78%, compared to 74% in the second quarter of 2023. This data indicates a growing confidence among non-residents in the Portugal real estate market, as they are willing to invest more and leverage financing options to secure their dream homes.

Top Locations for Housing Loans

The report highlights that the Lisbon district leads the way in housing loan requests from foreigners and emigrants, accounting for 21.6% of the total requests. Following closely are Faro with 16.4% and Porto with 12.7%. The Setúbal district also features prominently, contributing 8.5% of the requests, while Santarém rounds out the top five with 5.4%.

Conversely, the districts with the least number of home loan applications from non-residents include Pico Island in the Azores, Évora, and Portalegre. This disparity in demand underscores the appeal of urban centers and coastal regions, which offer not only stunning landscapes but also a vibrant lifestyle that attracts foreign investors.

Who Are the Buyers?

The profile of foreign buyers seeking housing loans in Portugal is diverse, with individuals coming from various countries. The report indicates that citizens residing in the United Kingdom submitted the highest number of loan requests, accounting for 18.5% of the total. They are followed by buyers from Switzerland (14.2%), France (12.4%), and Brazil (11.3%).

Notably, buyers from the United States stand out with an average household income of €8,526, the highest among the countries analyzed. This demographic is also interested in buying real estate in Portugal at higher price points, averaging €245,818, although they exhibit one of the lowest percentages of financing at 77%.

Irish buyers, representing 3.2% of total requests, have also shown a keen interest in the Portuguese property market. They requested bank loans worth €218,224 to purchase homes valued at an average of €238,180, with a financing percentage of 78%. This data reflects the growing trend of international buyers seeking to invest in Portugal real estate market.

The Appeal of Portugal's Real Estate Market

Several factors contribute to the increasing interest in invest in Portugal real estate market among non-residents. The country's favorable climate, rich cultural heritage, and relatively affordable property prices compared to other Western European nations make it an attractive option for foreign investors.

Additionally, Portugal's Golden Visa program, which offers residency to non-EU citizens who invest a certain amount in real estate, has further fueled demand. This program allows investors to gain residency rights for themselves and their families, making it an appealing option for those looking to relocate or invest in a second home.

The data from the second quarter of this year underscores the growing trend of non-residents seeking housing loans in Portugal, particularly in the cities of Lisbon, Porto, and Faro. With buyers primarily hailing from the United Kingdom, Switzerland, and France, the Portuguese property market is witnessing a significant influx of international investment.

As families report higher incomes and seek larger financing percentages, it is clear that confidence in the market is on the rise. The appeal of Portugal's vibrant cities, coupled with favorable investment conditions, positions the country as a leading destination for foreign property buyers. As this trend continues, it will be interesting to observe how the Portuguese real estate landscape evolves in response to this increasing demand.