Following the end of Portugal’s bailout programme by the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB), which lasted from May 2011 until June 2014, foreign investors are now looking at Portugal with different eyes.
As part of the bailout programme, Portugal implemented an ambitious privatisation programme and made other reforms to reduce its public debt, attract foreign investment and foster competition in closed or semi-closed sectors.
Foreign investment showed some positive signs in 2014 pushed by the success of the privatisation programme, increased activity in private sector, M&A and investments in residential and commercial real estate.
The golden visa programme which gives foreign investors the possibility of obtaining a Portuguese visa provided they invest a minimum of €500,000 is probably the main factor in attracting investment in medium-size properties, especially in the residential market.
Still price and yield in the current market conditions remain interesting, as local banks and corporations holding large real estate investments are looking to dispose or monetize real estate assets.
The recently announced quantitative easing measures adopted by the ECB which will increase liquidity in the financial markets are likely to renew investors’ appetite for real estate assets in Europe.
The Portuguese real estate market now offers very interesting opportunities, as the country emerges from its worst crisis in the last thirty years, with good valuation opportunities.
This paper summarises certain legal and regulatory issues affecting the investment in property in Portugal.
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