The purchase of homes in Portugal by foreigners fell in early 2024, coinciding with the end of the Non-Habitual Residents (NHR) regime on previous terms and the golden visa programme for real estate investment. What stands out is that foreigners also bought homes 6.8% cheaper compared to a year ago, according to data from the National Statistics Institute (INE). Nevertheless, these international citizens continue to buy homes 39% more expensive than Portuguese buyers.
The decline in home sales is a trend that continued in Portugal earlier this year, despite lower interest rates and inflation. INE reported in mid-June that the decline in home sales was more pronounced among foreign buyers (-17.1%) than among Portuguese buyers (-3.1%). The explanation for this contraction in the international market may lie in the end of fiscal benefits that directly or indirectly influence home purchases by foreigners.
Now, the Portuguese statistics office has revealed that "in the first quarter of 2024, the average value of family dwellings transacted in Portugal involving buyers with tax residence abroad was 2,248 euros/m2, down 6.8% compared to the same quarter last year," reads the report published in July 2024. On the other hand, residents in national territory bought homes for a average value of 1,616 euros/m2, up 6.0% from the same quarter last year.
Nevertheless, the average price of homes purchased by those living abroad is still 39% higher compared to the cost of homes purchased by Portuguese, according to INE data for the first quarter of this year. This difference is now less pronounced than a year ago: in early 2023, foreigners bought homes 58% more expensive than residents in Portugal.
This price difference is even more pronounced in major urban centres. "In the Greater Lisbon and Porto Metropolitan Area sub-regions, the median price of transactions made by buyers with tax residence abroad exceeded, respectively, by 82.3% and 47.5%, the price of transactions by buyers with tax residence in national territory," highlights INE.
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