One of Europe’s oldest cities, Lisbon maintains a historic 18th century architecture along with cobbled streets and a charming café culture. It’s a European cultural hotspot with a fantastic reputation for local food and wine, together with a sunny climate and beach location on the Atlantic coast of Portugal.
A booming tourism trade is driving economic and employment growth in Lisbon, with 10.8 million overnight stays per annum - equivalent to a 60% increase over six years.
Strong demand for housing contributed to house price growth of 5% in Greater Lisbon in 2017, taking the average house price to $207,800. The city of Lisbon experienced even higher growth of 13% over the same period.
Supply side tax incentives and a new lease law has boosted residential development in recent years, with a primary focus on the refurbishment of old buildings in the city centre.
These developments have been particularly popular among international buyers, who consider Lisbon an affordable market in relation to other global cities. The average price for prime residential property is currently around $520psf, which compares favourably with Paris ($1,218psf) and London ($1,666psf).
With opportunities for renovations in the city centre now diminishing, developers are increasingly targeting new construction outside of city centre, which will place in the market more affordable houses for the domestic market.
The rental market in Lisbon is also performing well, with rental growth of 21% year-on-year recorded for Q1 2018. This continues to be driven by a lack of supply and strong demand in the short-term rental market.
Future growth is predicted for Lisbon’s burgeoning technology, media and financial industries. Together with tourism, they support the city’s contribution of 45% of GDP for the whole of Portugal.