As safe bets go, Portugal is ticking all the boxes, appealing to savvy Anglo-Saxon investors. Set for growth thanks to a booming tech industry, government policies fostering foreign investment, and the country’s popularity as a tourism and relocation destination, Portuguese property markets are poised to soar and provide a safe haven in Europe. Investment by both US and UK citizens in Portugal is forecast to grow exponentially in a post-Brexit, post-Trump and post-Covid era.
In 2020, the US already represented the fastest growing market for realtors and funds focused on property in Portugal. According to the Portuguese tourism board, American citizens were the demographic demonstrating the sharpest rise despite being relatively new to Portuguese shores. The British on the other hand, are no strangers to Portugal, often referencing the historic Anglo-Portuguese Treaty of 1373 as the world’s longest standing alliance. On the day their referendum results were revealed, the Portuguese political and business elites displayed genuine regret to be losing a like-minded ally at the EU table. British tourists brought nearly 3.3bn euros to the Portuguese economy in 2019, swathes of retirees pour onto the countries’ golf courses all year round and generations of wine-making British families along Oporto’s Douro valley, made port world famous and continue to produce, promote, expand and export. In 2020, restrictions reduced travel significantly, but that didn’t deter either countries’ citizens from investing remotely in funds if not property in Portugal.
The Portuguese real estate company Quintela + Penalva | Knight Frank, with a stronghold in Lisbon, Cascais, Comporta and Oporto, confirmed their fastest-growing demographics in home seekers in 2020 were British and American citizens. Lisbon-based real estate investment fund, EQTY Capital is seeing the same trend. In our recent interview with EQTY’s head of business development, Michael Maxwell explains: “Prior to the pandemic, the real estate markets had a very obvious boom. Excitingly, a lot of that boom didn’t involve American investors to a large degree. They have only really arrived in quantity in the last year or two. We are seeing that as being the fastest growing demographic of investors”.
One South African broker based out of Cascais confirmed witnessing a fast-tracking of departures in 2020 from New York in particular. The reasons behind the mass exodus vary. In times of socio-political unrest in the US, the fact that Portugal ranks as the 4th safest country in the world is no doubt an important attraction. For Britons who were permanent fixtures on Portuguese soil, Brexit instilling economic uncertainty was bad enough, but limiting their access to their home away from home was not an option. Henley & Partners index on residency-by-investment or citizenship-by-investment programmes also pit Portugal in the three most popular, with a notable uptake by relative newcomers – Americans. As New York and LA ranked in the top 10 of the world’s most expensive cities in 2020 according to the EIU (Economist Intelligence Unit) and property taxes were set to increase in both cities under the Biden administration, it is no surprise that Portuguese realtors noticed an increase in people relocating to Portugal from the United States.
A family that relocated from New York to Lisbon tells us, “one should not move for fiscal reasons, or else we would all be living in Dubai or Singapore. In Portugal’s case, fiscal benefits were merely the cherry on the cake”. Portugal has enormous appeal for a number of reasons with those most often quoted being lifestyle; cost of living; safety; architecture and nature; infrastructure and technology and access to talent; and finally fiscal benefits for foreign investors of all categories.
For digital nomads and tech entrepreneurs, lifestyle and a burgeoning tech scene are important, and Portugal offers a competitive, highly qualified talent pool, startup-friendly taxes as well as an enviable quality of life. For families with young children, an ever-increasing number of good international schools and affordable quality healthcare proves a major bonus. Naturally, getting more bang for your buck in central Lisbon or along the many beaches near the capital, helped sway the masses. Amid Covid-19 lockdown times, Europeans living in the US or the UK’s major cities brought their return plans forward to escape their towers of power for a healthier life and chose Portugal’s softer versions of lockdown, with little-to-no policing and a peaceful, safety-seeking population.
Add to that, tourism is set to return to its pre-pandemic days of glory. The 2020 World Travel Awards voted Portugal as the overall winner for the 4th year in a row, fending off competition as “Europe’s Leading Destination”. Awards included “Europe’s best city-break” which went to the city of Oporto in the north, “Europe’s best beaches” to the Algarve in the south, “Best Adventure Travel destination” went to the Azores islands and the list goes on. As a destination to live or relocate, Bloomberg Wealth ranked Lisbon 3rd in their top 10 survey of Expats’ new favourite cities worldwide as people sought fairer pastures.
It’s no wonder British and American citizens vying for a second passport as a safety net in uncertain times, one that grants them access to the Schengen Area’s 26 European countries, has fast become an increasingly popular option. Whether they are investing in real estate in Europe in the form of a second home, relocating altogether or investing via funds focused on property that qualify them for citizenship, Portugal is winning over UK and US investors.
The relationship is reciprocal. Portugal has benefited from old friends and new buying into the residency-by-investment programme that is the Golden Visa to the tune of €5.6 billion since the programme’s inception in 2012. Access to Europe, favourable legislation and incentives for foreign investors have worked, but British and American citizens alike are betting on Portugal as if their lives depended on it for a myriad of reasons, besides the obvious safe investment. When it comes to a better quality of life, Portugal has proven to be a safe bet.