In 2023, Portugal faced political and economic challenges, yet its real estate market remained strong due to high tourism and continued foreign investor interest. Overall optimism prevails for 2024.
2023 was a complex year marked by a very negative global outlook, marked by geopolitical conflicts in Ukraine and the Israeli-Palestinian region, market volatilities, inflation fluctuations, and rising interest rates. Portugal, amidst this turbulence, grappled with uncertainties, witnessing alterations in regulations such as the gold visa program and non-habitual resident status. Moreover, the nation confronted a political crisis leading to the fall of the Portuguese government and the subsequent call for early parliamentary elections.
Despite these challenges, buyers continued to show a strong interest in Portugal's real estate market, drawn by its enduring appeal. This attractiveness is underscored by the record-breaking tourism figures witnessed in 2023. The country welcomed over 30 million guests, totalling an impressive 77 million overnight stays, generating revenues amounting to around 25 billion euros. These figures attest to Portugal's unwavering allure as an investment destination.
As 2024 unfurls, early indicators suggest a resilient Portuguese real estate market, poised as an appealing option, particularly for foreign investors. While economic growth might not match previous projections, Portugal remains a haven for long-term investments due to its secure and stable environment. Savills World Research anticipates a surge in global real estate investment this year, identifying Portugal as a prime destination, mainly owing to its robust tourism potential. Experts at Savills predict an optimistic investment climate for 2024, with approximately 57% foreseeing a moderate to strong uptick in investment activity. This figure escalates to 70% for multifamily residential properties and 66% for industrial and logistics properties.
However, a potential decline in building permits could trigger a reduction in available housing supply, potentially leading to increased real estate prices due to the supply-demand equilibrium.
Notwithstanding the challenges, Portugal's real estate market has demonstrated remarkable resilience, witnessing consistent upward momentum in property values over recent years. The rental market remains an attractive avenue for investors, promising lucrative returns on investment through appealing yields.
Despite the lingering challenges from the previous year, YPA remains optimistic about 2024 and foresees a good year. Our unwavering commitment, robust business model, and strong client portfolio position us well to capitalize on emerging opportunities.
We believe that opportunities will arise, and we will be here to work on them with the usual utmost effort and professionalism.
