For each euro invested by a foreign resident in a housing asset in Portugal, 7 euro are generated in the Portuguese economy over the following five years. This is the conclusion drawn from the latest study carried out by the Portuguese Resort Association (APR) based on numbers from the Portuguese Statistics Institute (INE), Eurostat and OECD, which integrates the direct, indirect and induced impacts the purchase of real estate assets have on the economy.
Pedro Fontaínhas, executive director at APR, remarked that «the impact of a housing purchase after five years is now seven times higher than the initial investment in Portugal for each new resident, be he foreigner or a former ex-pat». Thus, the 3.4 billion euro investment carried out by new residents in Portugal in 2019, will, according to INE, generate a total 21 billion euro until the end of 2023.
«These numbers show the extraordinary interest the state and companies have in developing Portugal’s competitiveness in terms of attracting foreign and domestic housing real estate investment. Under the current competitive landscape, boosted by the economies’ need to recover, the quality of the offer, geographical, climate and social attributes are not enough», considered Pedro Fontaínhas.
He further added that «we should also revert our increasingly less attractive tax, legal and bureaucratic policies and make Portugal a desirable country for those who seek a place to live, work, raise a family and retire».
In 2019, the Algarve represented 38% of this investment and 27% of the number of assets. Lisbon had a 36% share of this investment and 21% of the number of housing assets, Portugal’s central region held the second place with 23% of the number of buildings traded.
According to this study, the main investors originate from France, United Kingdom, Brazil, Germany, China, Spain and Holland. In terms of average amount invested, the top places are taken by China, Brazil and the United Kingdom. The UK is also the main buyer of premium assets traded below 500.000 euro.
In terms of foreign families’ spending in Portugal, French families spend the most, closely followed by English and German.
Golden visa provide «amazing contribution»
Pedro Fontaínhas also highlighted the importance the Golden Visa have in this equation, recalling that «SEF’s (Portuguese Foreigners and Boarders Service) data shows that in 2019 buildings sold above 500.000 each reached a total of 584.5 million euro under the golden visa regime. This number, which is significant for the housing real estate segment, represented less than 2.5 per 1000 of all urban buildings traded during the same year. Considering this disproportionate value, the arguments certain people raise against the Golden Visa, claiming market distortion and/or inflation, or taking houses away from the Portuguese people are not acceptable. That is obviously not the situation. What the Golden Visa are contributing for, is the improvement of the Portuguese economy in a very significant way, as shown by the aforementioned study».
He also defended that «any limitation to the attraction of foreign capital to be invested in housing real estate is a shot in the foot, the more serious the situation the more demanding will the need become».