Foreigners invest a record amount in property in Portugal

The restriction of bank financing and the end of gold visas in Portugal for property purchases have created a climate of uncertainty for foreign investors. But the data now published by the Bank of Portugal (BdP) reveals that, until September, foreign investors were more active than ever in our country. This is because foreign direct investment in property reached a record high in the summer of 2023, totalling 30,447 million euros, 14% more than in the same period last year.

Since the beginning of 2008, foreign direct investment in the Portuguese property market has been growing steadily, with high after high. And in the third quarter of 2023 it added another: 30,447 million euros came from abroad directly into Portuguese property, a new record, as the BdP data shows. This is 14% more than in the same period last year and almost 4% more than in the previous quarter.

In addition, the Portuguese regulator's data published last week also shows that the value of transfers from international investors to the property sector was 1,137 million euros between July and September, also the highest figure ever. The previous maximum was 1,047 million euros, recorded in the second quarter of 2022.

If we analyse the transfers of foreign direct investment into real estate in the first nine months of 2023 - which amount to 3,018 million euros - it is clear that this figure also represents a maximum in the BdP's series, which began in 2008.

Foreign direct investment in real estate

Millions of euros idealista

All this data shows that foreign direct investment in Portugal for the property sector was at an all-time high in 2023. This is despite the challenging context in the Eurozone, marked by high interest rates, cooling property transactions and uncertainty about the course of the war in Ukraine and the conflict in the Middle East. There is also a climate of uncertainty at home, generated by the end of the gold visas provided for in Mais Habitação, which came into force on 7 October.

The announcement of the end of the golden visa even increased foreign investors' demand for real estate in our country, which suggests that there may have been a rush to the programme before its end. Data for the last quarter of 2023 is now awaited to see whether or not the end of gold visas has had an impact on this investment.

On top of all this, the government has also proposed the end of the Non-Habitual Resident (NHR) regime for 2024, which could also affect the arrival of foreign families, workers and investors in our country - although it has now designed a transition period for those who can prove that they were already planning to move to Portugal this year. This could also affect the arrival of foreign families, workers and investors in our country - although it has now designed a transition period for those who can prove that they were already planning to move to Portugal this year.