Portuguese Real Estate Market vs. the Golden Visa: Separating Myth from Reality

Charles Taylor Harris Executive Director

The Portugal Golden Visa program has been subject to much debate, with some claiming that it is responsible for the housing crisis in the country. The long-running controversy, eventually, has boiled down to the potential termination of the program by the Portuguese government with the said reasoning.

The following data shows why the claims as to the contribution of the Golden Visa program to the housing crisis in Portugal are baseless and incorrect.

The Portugal Golden Visa: Separating Myth from Reality

A closer examination of the data suggests that such an assertion is largely unfounded. The available data suggest that foreign investors represented a modest 2.99% of all real estate transactions in the first half of 2022. Within this subset, Golden Visa applicants comprised an even smaller percentage, accounting for a mere 0.6% of all transactions in the same period. Furthermore, the statistics reveal that the Golden Visa program had a total transaction value of €534,626,804.91 in 2022, representing a minuscule 1.63% of the overall transaction value of €32.7 billion. These numbers highlight the limited role of international investors, including those involved in the Golden Visa program, in shaping Portugal’s real estate market. In other words, it’s clear that these investors do not have a significant impact on the market, and their participation represents a relatively small fraction of the total transactions. Therefore, they are unlikely to cause significant price hikes or contribute significantly to the ongoing housing crisis in the country.

In fact, the Portuguese government recognized the potential risks associated with the program and implemented changes that took effect in early 2022. These changes restricted Golden Visa investors to purchasing only commercial properties, rather than residential properties. Hence, the Golden Visa program is unlikely to have a significant impact on the housing crisis, which is driven by domestic factors such as low construction rates and population growth for the most part.

Ultimately, blaming the Golden Visa program for the housing crisis oversimplifies a complex issue and distracts from the need for a comprehensive solution that addresses the root causes of the problem. It is crucial to recognize that the Portugal Golden Visa program has been a significant contributor to the country’s economic growth. Therefore, striking a balance between promoting foreign investment and ensuring that the needs of the domestic population are being met is of capital importance.

Foreign Real Estate Investment After the Termination of the Golden Visa

Portugal has been a top choice for real estate investment for many years and will continue to be so even if the Golden Visa program shuts down. The country offers numerous advantages that make it an attractive destination for property investment. One of the most significant factors is the low cost of living, which also translates into affordable property prices. The price per square meter for properties in Portugal still proves to be notably lower than in other European countries, making it a great opportunity for investment. Furthermore, living in Portugal is an excellent option for people from all over the globe due to the time zone convenience deriving from its location, which allows great compatibility for those having professional ties to their home countries. 

Despite the low cost of living, Portugal offers an incredibly high quality of life, which is yet another factor that makes it an ideal destination for real estate investment. The country has consistently been ranked as one of the best places to live in the world, thanks to its rich culture, beautiful landscapes, and welcoming people. The weather is also a big draw, with mild winters and long summers making it an attractive destination for those looking to relocate. On top of these, Portugal offers an excellent healthcare system and infrastructure, hence a practical choice for retirees and families alike.

To conclude, while the Golden Visa program has undoubtedly contributed to Portugal’s popularity as a real estate investment destination, the country’s other attractions mean it will remain an ideal place for investment even without the program. Boasting a rich history and culture, and delicious food and wine, Portugal will remain the perfect destination for those who seek to invest in a unique and enjoyable lifestyle.

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