Investors outside the EU are increasing their real estate purchases in Portugal.

The end of the golden visa program and permanent residency regime may explain the situation. Home sales in Portugal declined in the summer of 2023. This is not only because the Portuguese themselves are buying less, but also because European citizens have lost interest due to reduced purchasing power and high mortgage interest rates. However, there are exceptions. People living outside the European Union (EU) are actively buying property in Portugal, with the number of transactions up 8.7% compared to last summer. The end of the golden visa program in October and the end of the permanent residency program in 2024 may explain the opposite trend, driven by a surge in demand from foreign investors from outside the EU, which has reached a five-year high.

In Portugal, 34,256 homes were sold between July and September 2023

...published Tuesday, Dec. 26.

It should also be noted that Portuguese people are buying fewer houses (-20.1%), as are foreign nationals living in Europe (-9.1%). Here is how the sold houses in Portugal from July to September 2023 are distributed, taking into account the fiscal residence of the buyers:

National territory: 31,515 dwellings were sold, down 20.1% on the previous year. In terms of value, sales amounted to almost 6.2 billion euros (-13.4%);
EU residents: a total of 1,349 homes were transacted, down 9.2% year-on-year.

Sale flat in Oeirash 153 877 $

Portugal,Oeirash

1 Bedroom

1 Bathroom

55 м²

Sale penthouse in Oeirash 139 839 $

Portugal,Oeirash

1 Bedroom

1 Bathroom

61 м²

Sale flat in Oeirash 188 972 $

Portugal,Oeirash

1 Bathroom

41 м²

Sale flat in Oeirash 221 367 $

Portugal,Oeirash

2 Bedrooms

2 Bathrooms

108 м²

Sale flat in Lisbon with city view 367 146 $

Portugal,Lisbon

2 Bedrooms

2 Bathrooms

107 м²

Sale flat in Lisbon with city view 306 675 $

Portugal,Lisbon

1 Bedroom

1 Bathroom

38 м²

The amount of sales amounted to 335 million euros (-20.3%);

Foreign residents outside the EU (rest of the world): 1,392 transactions were made, corresponding to an 8.7% increase on the previous year. For these sold houses, 566 million euros were invested, 11.3% more than a year ago. This means that, unlike Portuguese and EU citizens, foreigners from outside the EU bought 111 more houses in summer 2023 compared to last summer and invested 57 million euros more. The number of homes sold by foreigners and invested is a five-year high according to the available UIE data series, which dates back to 2019.

But what could be the reason for the increase in house purchases by those living outside the EU at a time of declining transactions? The truth is that this increase in housing transactions occurred a few months before the end of the golden visa program for real estate investment - which ended on October 7 with the introduction of the More Housing program. And that's not all: also in 2024 the permanent resident (RNH) program will end, and there is a transition period for those who prove that they plan to move to Portugal as early as this year, which can be done, for example, through a real estate purchase agreement. This is exactly what several American families are doing. Those who have not prepared to move to that country as early as this year will fall under the stricter criteria of the new research and innovation tax incentive that will replace the "RNH" program in 2024.