Why invest in Portugal real estate? Average income take a look - Investments - Estadão E-Investidor - Home Financial News

In recent years, real estate in Portugal has experienced significant growth, which has attracted many foreign investors, including Brazilians, to purchase real estate. A few reasons for this situation are rising rental values and their yields, distrust in the European financial system, rising real estate prices, tax incentives and increased security.

Real estate in Portugal attracts investors because of the opportunity to earn high financial returns. The sector has experienced significant growth in recent years, which has attracted many foreign investors, including Brazilians, to purchase real estate. One of the main reasons for this movement is the rising cost of rent. According to Portugal's National Institute of Statistics, house rental prices have risen significantly, increasing by 10.6% in the last quarter of 2022 compared to the same period of the previous year. This demand drives prices, making them attractive to investors. Moreover, distrust in the European financial system is forcing Portuguese investors to channel their savings into real estate, further increasing interest in this sector.

Returnability is another factor that makes the Portuguese real estate market attractive. According to industry experts, property rental yields in Portugal can be as high as 8-9%, which is considered very high compared to other European countries that typically offer rates of 3% to 4%. This high yield is due, in part, to the lack of available rental properties, forcing some tenants to pay a full year's rent.

Another factor to consider is the recent change to the rental tax system in Portugal. The government has reduced tax rates, making the rental market even more attractive. Owners who rent out their properties for a period of five years will receive a significant reduction in taxes levied on the income.

At the same time, the Portuguese real estate market has become safer and more stable compared to previous years. After the 2008 crisis, when many buyers and developers were saddled with debt, there was a restructuring of the industry. Banks started giving out fewer loans, which led to a reduction in the solvency problems of the Portuguese. This, together with the presence of international funds as major developers, makes the Portuguese real estate market a safe investment option.