The Real Estate Boom: Blessing or Crisis?

Portugal's real estate market has experienced explosive growth since 2013, with Lisbon property prices increasing by over 150% in a decade. The Golden Visa program, Airbnb boom, and foreign investment have revitalized neglected neighborhoods but also created a housing affordability crisis for locals.

The Golden Visa Effect

Launched in 2012, Portugal's Golden Visa program granted residency permits to non-EU citizens who invested €500,000 in real estate (reduced to €280,000 in low-density areas). By 2023, the program had attracted over €6.5 billion in investment, primarily from Chinese, Brazilian, and American buyers. While it brought billions into the economy, it also drove up prices in Lisbon and Porto, pricing out local buyers.

Neighborhood Transformation

Neighborhoods like Príncipe Real, Santos, and Alfama underwent dramatic gentrification. Crumbling buildings were renovated into luxury apartments and boutique hotels. Traditional grocery stores and cafes were replaced by concept stores and trendy brunch spots. While this revitalized urban areas and created jobs, it displaced long-term residents who couldn't afford rising rents.

The Airbnb explosion exacerbated the crisis. In Lisbon's historic center, entire buildings converted to short-term rentals, reducing housing stock and creating 'ghost neighborhoods' filled with tourists but few residents. In 2019, Lisbon had over 20,000 Airbnb listings—in a city of just 500,000 people. New regulations have since limited short-term rentals in saturated areas.

The Current Market

As of 2024, average property prices in Lisbon hover around €4,500-€5,000 per square meter, with prime locations exceeding €7,000. Porto averages €3,000-€3,500 per square meter. The Algarve commands premium prices for coastal properties. Rental prices have similarly soared: a one-bedroom apartment in central Lisbon costs €1,200-€1,800 monthly, while average Portuguese salaries remain around €1,200-€1,500.

"

My family has lived in Alfama for four generations. Now my children can't afford to live in the neighborhood where they were born.

The Portuguese government has introduced measures including rent controls in pressure zones, incentives for landlords offering long-term rentals, increased property taxes for vacant properties, and the 'Mais Habitação' (More Housing) program to increase affordable housing supply. The effectiveness of these measures remains to be seen.