Data from Portugal’s Real Estate Agents Association has revealed that more than one in five homes in Portugal was purchased by a foreign national last year. The top foreign home buyers were the British (23,000), followed by nationals of China and France.
Portugal’s property prices had fallen by a third as a result of the Euro debt crisis, following which the Portuguese government introduced the golden visa scheme to help pull the country out of its financial crisis. However, allegations of scams in the scheme as well as news of multinational accounting fraud at Banco Espirito Santo last year caused several senior officials to resign and raised concerns about Portugal’s property market’s recovery.
However, the country’s good climate, taxation laws and favorable property prices have ensured that the steady flow of foreign buyers continues to grow.
“The property market grew by between 9 and 15 per cent in 2014. If it hadn’t been for the Banco Espirito Santo debacle and the golden visas scandal it would have been 25 per cent,” says Luis Lima, head of Portugal’s Real Estate Agents Association.
Along with the Chinese, the number of French nationals moving to Portugal is also seeing a steady increase, with Portugal replacing Morocco as the favorite destination for retirees from France.
Portugal’s golden visa program is targeted at rich foreign investors who can get Portuguese residence permits by purchasing property worth at least €500,000 or more and retaining it for a minimum of five years. The residency permits allow the investors to travel visa-free through 26 countries of the Schengen zone in Europe.
Most buyers of Portugal’s golden visa program have been rich Chinese investors who are known for their preference for plush homes with swimming pools near the coast.
According to Pascal Goncalves of Maison au Portugal real estate agency, the increasing numbers of foreign buyers has “helped increase the prices of nice apartments in Lisbon and the Algarve region”.
Portugal has given out 2,022 golden visas since the program was launched, earning it a total of more than 1.2 billion euros.
The golden visa program had received a setback in November last year when 11 officials had been arrested on charges of corruption and money laundering. It had been alleged that some of them had colluded to falsely inflate property prices in Portugal so that they would be eligible for purchase under the golden visa scheme.
However, immigration experts believe that the scandal will not cause any long-term damage to the golden visa program and subsequent property investment.
“The visa scandal has certainly slowed the recovery of the market and harmed investor confidence, but real estate should continue to stimulate the Portuguese economy in 2015,” says Lima.
Source: www.scmp.com