According to a survey from the Royal Institution of Chartered Surveyors, Portugal housing prices rose in January for the first time since the monthly survey began in 2010 and for the first time since the country’s financial bailout.
The report expects sales prices to continue to increase for the next three months but notes that a longer trend of positive data is required to regard it as a genuine market recovery. Unlike sales prices, Portugal’s rental prices continue to fall; however, that is expected to change in the coming months.
The report highlights Portugal’s economic situation, citing an expanding GDP and falling unemployment as a source of the housing market’s recovery. After three straight years of decline in annual GDP growth, the Portuguese government estimates GDP growth in 2014 reached a modest 1%, and expects 1.5% for 2015. Unemployment in Portugal has dropped 2% in the past 12 months and now sits at 13.4%, down from a 17.7% peak in early 2013.
Foreign interest in Portugal’s housing market is driving the recovery of Portugal housing prices as well. Foreigners were responsible for 90% of the 730 million euros invested in Portuguese real estate in 2014—triple the amount in 2013—according to data compiled by Aguirre Newman SA, a real estate consulting company in Lisbon. Foreign buyers are mainly U.K., followed by French and Chinese buyers, according to the Portuguese Real Estate Agents Association.
Some of this foreign interest in Portuguese real estate is a result of the country’s “golden visa” program, which began in 2012 and has earned the country over 1 billion euros in revenue. The program allows a foreigner who buys property for at least 500,000 euros to obtain a five-year residency permit and gain access to the 26 countries that make up Europe’s open-borders Schengen Area. Chinese applicants make up more than 80% of the 1,526 permits issued through the program in 2014, according to Portugal’s foreign ministry.
In 2014, Live and Invest Overseas named Portugal’s Algarve region as the Best Place To Retire.