Foreign Buyers Pay Almost 70% More for Property in Portugal

Foreign buyers are willing to pay, on average, 67% more for housing than domestic buyers in Portugal. Although they only represent around 6–7% of transactions, the average amount spent by these buyers is significantly higher.

According to recent data, foreigners purchased homes for an average price of €353,437, while Portuguese buyers paid around €212,099 in the same period — the difference is almost double the value for local investors.

This behavior reflects a pattern:

• Most purchases by foreigners are concentrated in areas such as Lisbon (40%), Algarve (13%) and Porto (9%);

• Many take advantage of the favorable exchange rate — especially Americans — and make purchases after selling properties in the US, generating increased purchasing power;

• Foreigners focus on homes of differentiated quality and in prestigious areas, which pushes up local prices.

This external pressure has tangible effects on the urban fabric: the central areas of Lisbon and Porto are becoming more elite, displacing middle-class families and reducing the affordable supply. Little by little, we are seeing movements of suburbanization and micro-gentrification — once-traditional neighborhoods are receiving a newer and more international demographic profile.

For the authorities, the challenge lies in measures that can balance this disparity. Some ideas that have been discussed include taxes on foreign investors, tax incentives for affordable housing, or automatic limits in certain areas. However, the implementation of these measures requires care to avoid restricting productive investments.

From the point of view of Portuguese buyers, the scenario implies realizing that they are competing in a market that is more segmented by price range. The strategy involves analyzing alternatives in the outskirts or emerging regions and integrating criteria such as income, financing terms and investment sustainability.

Source: idealista/news, Expresso, Jornal de Negócios

Hashtags: #ForeignInvestment #HousingPortugal #ForeignersPortugal #RealEstateBubble #Gentrification