The latest release of the 2023 Residential Market Study by Savills Portugal showcases the accomplishments of 2022 and forecasts the anticipated shifts and trends for the Lisbon, Porto, and Algarve areas in 2023.
Portugal continues to maintain its allure as an appealing destination for foreign buyers. By the end of 2022, foreign investment in residential properties reached 3.6 billion euros, accounting for 10,722 properties sold. The demand remains robust, driven by strong market fundamentals such as safety, favorable climate, and quality of living conditions. Additionally, the growing transition to a digital economy, enabling remote work from anywhere in the world, has further enhanced Portugal’s attractiveness.
According to the “Savills Executive Nomad Index” cited in the study, Lisbon has surpassed cities like Miami, Dubai, and Barcelona to become the top city globally for digital nomads.
Leading the sales charts are France, the United Kingdom, Brazil, China, and the United States of America. These buyers tend to seek exceptional areas and prestigious buildings of high architectural quality, aiming to acquire either permanent residences or second homes.
Miguel Lacerda, Lisbon Residential Director at Savills Portugal, highlights that foreign customers represent more than 50% of transactions in the high-end market, which is expected to continue due to their resilience to inflation and rising interest rates.
In 2022, approximately 51,000 homes were sold in the Lisbon Metropolitan Area, consistent with the previous year. Lisbon itself accounted for the majority of transactions, with around 11,300 homes sold, followed by the municipalities of Sintra, Setúbal, and Cascais.
Savills’ pipeline survey indicates that over the next two years, more than 4,500 new residential units are expected in the municipality of Lisbon, considering only projects currently under construction. However, it is worth noting that at the time of the report’s publication, only 32% of residential units were available for sale, reflecting strong demand dynamics.
In terms of average sales prices, new properties in the Lisbon Metropolitan Area experienced a decrease of almost 7% in 2022 compared to 2021, reaching €5,399 per square meter. On the other hand, second-hand properties saw an increase of around 5%, with average prices standing at €3,225 per square meter.
Luxury segment
In the luxury segment (properties priced 5% higher), an analysis since 2011 reveals a continuous growth trend in asking prices, reaching €11,500 per square meter in 2022, compared to €5,000 per square meter in 2011.
Regarding the impact of increased construction costs on project prices, Savills engaged with three prominent developers in the residential market in Portugal. Alexandra Portugal Gomes states that, overall, there is a sense of cautious optimism. Projects are progressing while accommodating the rise in construction costs, reflected in the asking prices of the properties being sold. For 2023, there is an expectation of ongoing project development with a slight increase in prices.
