Portugal property sales drop by 20% due to Golden Visa

Home sales in Portugal fell in the first half of this year due to rising interest rates and the government's decision to end incentives for some foreign buyers, real estate services firm Jones Lang LaSalle said.

Home sales fell 22% to 68,000 units in the first half of the year from the same period a year earlier, according to JLL. Some 168,000 units were sold in Portugal in 2022, a record sales volume. However, property prices are not expected to fall anytime soon as demand for housing continues to exceed supply.

"The structural supply shortage continues," Joana Fonseca, head of research at JLL, said at''Lisbon presentation. "The pace of new housing coming onto the market continues to remain well below the volume of demand.

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Earlier this year, Portuguese Prime Minister Antonio Costa announced the closure of a golden visa program to curb speculation in the real estate market and end the housing crisis in cities including Lisbon, where property prices have tripled since 2015. His Socialist government will also end the so-called non-permanent resident regime next year, which offers lower income tax rates over a 10-year period for qualified people who move to the country.

One of the programs helped revive Portugal's stagnant real estate market after 2011,''when the country was suffering from a deep recession. While these programs still help attract foreign property buyers, they now account for only a small fraction of real estate transactions in Portugal.