PERSPECTIVES: Portugal Emerges As A Hotspot For High-Net-Worth Buyers

A villa with a red roof, a green yard, and a clear blue pool.
International buyers are flocking to Portugal's resort areas. (Portugal Forbes Global Properties)

This report is part of PERSPECTIVES, a comprehensive look into the world of prime residential real estate. Access the full report here to discover the latest trends and dynamics shaping the market.


Portugal is becoming a hotspot for high-net-worth individuals interested in owning real estate in Europe and lured by the country’s warm climate and charming towns. It also ranks as the seventh safest country in the world, according to the 2023 Global Peace Index.

The challenge? It’s a small country—about as big as the state of Indiana—with a tight supply of housing.

At the start of 2023, the headlines in Portugal expressed a sense of caution. Discussions throughout the country focused on rising interest rates, a dip in foreign investment and the possibility of a slowdown in development—variables that created a heightened sense of awareness in the market.

But fast forward some 12 months and reality paints a prettier picture.

Investment in luxury developments remains strong. Wealthy buyers from overseas are continuing to purchase. Sale prices are growing steadily despite a handful of interest rate hikes.

Villatura in Quinta do Lago, Algarve. Presented by Portugal Forbes Global Properties

“Portugal has become an international destination and that’s something we’re still reaping the rewards from,” says managing partner Pedro Teixeira Santos of Portugal Forbes Global Properties. “There’s a lot of investment coming in and a growing interest.”

As supply inches upward, prices will continue to rise in 2024.

“We’re reaching record prices,” Santos says. “That’s not just because prices are increasing or because demand is increasing, but also because the quality of the products which are being built today are far superior than they were maybe five to 10 years ago.”

The Algarve, Portugal’s southernmost region with 300 days of sunshine and long, sandy beaches, has seen remarkable growth. In a 12-month period ending in October 2023, values have jumped as much as 15% and are expected to grow another 19% by 2025.

Quinta do Lago, an exclusive resort in the Algarve known for its opulent residences, award-winning golf courses and access to trophy facilities, is a favorite among foreign buyers. “The pandemic solidified the positioning of the resort, with clients valuing the lifestyle,” Santos says.

Looking ahead, expect more luxury developments with high-end housing and hotels throughout Portugal. Santos says his brokerage is starting to see an increase in upscale developments backed by international funds, with particular interest in the Comporta/Melides area, Cascais and the Golden Triangle in the Algarve.

A wide estate with a contemporary look and a big reflective pool.

Turnkey villa in Gandarinha, Cascais. Presented by Portugal Forbes Global Properties

Many overseas buyers are from Brazil, which shares the same language, as well as from the United States. As 2024 unfolds, Portugal is likely to see an increase in investment from wealthy buyers in both countries.

“The Algarve has not yet been discovered by U.S. buyers,” Santos says. With a direct flight from Newark, New Jersey to Faro (Algarve’s capital) starting in May and “a very attractive product that is well-fitted for Americans,” that could soon change.

Interest from Brazilians and Americans is increasing, similar to the historical enthusiasm Europeans have shown for the country. In years past, Europeans flocked to Portugal in search of attractive taxes, a better price per square foot and a premium quality of life.

Changes to the Golden Visa program have introduced new challenges for those aiming to secure residency while having minimal impact on the purchase of vacation properties. In an effort to rein in housing prices, the Portuguese government in October ended investments in real estate and certain capital transfers that non-European Union citizens had used to gain residency and tax benefits.

For those ultra-high-net-worth individuals who want to buy their vacation home in Portugal and are not looking for residency, the impact should be negligible, Santos says.

Still, there are some loopholes and other avenues that can provide a similar benefit. These include investing a minimum of €500,000 (US $543,000) in a venture capital fund or creating at least 10 jobs.

“If you want to invest 10 million in Portugal, you’re fine,” he says. “If you want to invest a million, then it’s not as attractive as it was before. There are ways to invest, but you have to be organized.”

Author

Natalie Hoberman’s work as a digital marketing consultant focuses on architecture, real estate and design. She’s a former editor at leading real estate news publication The Real Deal.

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