Spain VS Portugal Property: An Investment Guide

The golden beaches nestled along the Atlantic Ocean, the fabulous local cuisine, and the excellent weather attract many foreigners to the shores of Spain and Portugal.

These stunning countries that share the Iberian Peninsula both offer a high quality of life and stable lifestyles in Western Europe.

This Spain VS Portugal property guide will explore the benefits of investing in the two countries, the main differences between buying real estate in each country, and a brief insight into the popular regions and cities in Spain and Portugal – from the Spanish Basque Country to the Portuguese capital of Lisbon and the stunning Algarve region.

Should I buy property in Portugal or Spain?

Considering you may have questions about whether to buy a property in Spain or Portugal, it is important to note that Spain and Portugal both offer unique value and significant reasons for buying property in either country. Below, we will briefly explore the benefits of living in each of these beautiful countries.

The benefits of living in Spain

Spain’s desirable climate and laid-back lifestyle has made the country a popular choice for relocation and retirement over the past few years.

The calm Mediterranean climate offers plenty of sunshine and experiences less average rainfall than European countries like Germany, France, and the UK, making it a prime destination for outdoor enthusiasts.

Living in Spain offers numerous benefits that make it an attractive destination including the fact that there are no restrictions on foreign property ownership in the country. The country’s rich cultural history, showcased by awe-inspiring architecture such as Gaudi’s works in Barcelona and the magnificent Alhambra in Granada, captivates visitors and residents alike. Spain is also home to world-class museums and a thriving arts scene that further enriches the cultural experiences you will find there.

Spanish cuisine, renowned for its rich and diverse flavors, provides a culinary journey like no other, with iconic dishes like Valencia’s paella and delicious tapas available throughout the country.

Spain is also known for its low cost of living, making it an appealing option for expats. Even in major cities, living expenses are lower compared to major cities like New York, Paris, Munich, and London. In addition to this, in February 2024, the Statista Research Department reported that house prices in Spain are forecast to fall in 2024, after increasing by 1.2 percent in 2023.

Residents also benefit from free access to a high-quality public healthcare system, and Spain is the 23rd safest country in the world according to the 2024 Global Peace Index. Overall, Spain’s gorgeous natural landscapes, from the lovely beaches of the Costa del Sol to the rocky Pyrenees, offer stunning scenery and outdoor activities matched with an affordable quality of life.

The benefits of living in Portugal

Living in Portugal offers numerous benefits, making it a desirable destination for both tourists and expats. One of the main advantages is the dynamic real estate market, which presents an opportunity for high returns on investment potential.

Additionally, the cost of living in Portugal is relatively low compared to other Western European countries, providing a more affordable lifestyle. Portugal’s sublime climate, featuring incredible summers and mild winters, enhances its appeal. The country is also renowned for its top-quality education and healthcare services. Safety is a significant factor, as Portugal is ranked the seventh safest country in the world according to the 2024 Global Peace Index.

The nation boasts incredible gastronomy, rich cultural and recreational activities, and vibrant festivals throughout the year. With no restrictions on foreign property ownership, Portugal remains an attractive choice for investment and living. Global property investors have been increasingly interested in property for sale in Portugal for the last decade. In fact, in February 2024, the Statista Research Department reported that the Portuguese housing market, on the other hand, grew by 5.5 percent in 2023.

Both Portugal and Spain offer perfect climates, visa-free travel in the Schengen Zone once you secure a residence permit, and a high-quality of life in the European Union. Ultimately, whether you decide to invest in Portugal or Spain will depend on your lifestyle preferences and your financial circumstances.

An overview of Portugal’s real estate market

Portugal’s real estate market offers attractive opportunities for international buyers seeking property investments at an affordable cost in a country rich in culture and history. If you choose Portugal, you will enjoy world-class port wine, Portuguese cuisine, clean beaches, and spa resorts in the stunning Algarve region. Portugal also has a thriving real estate market which has remained resilient despite external pressures of the past, such as COVID-19.

The demand of many residents and expats seeking accommodation in major cities has created a competitive property market in Portugal and increased rental yields across the country.

In late 2023, rental yields increased to 6.7 percent in the Lisbon Metropolitan Area, 6 percent in the Porto Metropolitan Area, and by 5.6 percent in the highly sought after Algarve region. Permanent residency is an added incentive for potential buyers.

In the table below we share the average price per square meter in 2023 for property in a few of the most popular areas to live in Portugal. Properties located outside the city center or further from the coast will be lower in price per square meter.

An overview of Spain’s real estate market

Spain offers an affordable cost of living, making it an attractive option for expats and retirees. Its rich culture and history, coupled with vibrant nightlife and delectable Spanish food, enhance the country’s appeal.

Permanent residency is a significant draw for those looking to spend long-term in a country with a mature property market that remains resilient despite the pandemic. According to Spain’s National Statistics Institute INE, house prices rose by 2.6 percent in the first quarter of 2024. The Global Property Guide also reported that the average gross rental yields in Spain grew to 6.17 percent in the first quarter of 2024.

Spain witnessed a substantial real estate market downfall in the 2008 to 2009 financial year. However, it has steadily risen since then, with a growing number of buyers entering the Spanish property market. According to Statista, the table below showcases average prices per square meter in popular Spanish regions in 2023:

The Portugal and Spain Golden Visa Programs: An Update

Both Portugal and Spain adopted the popular Golden Visa Program, each with its own minimum investment requirements, to encourage foreign investment and boost the state economy. This program attracts hundreds of investors each year.

However, there have been changes made to the program in both Spain and Portugal. In April 2024, Spain decided to end the Golden Visa program, which previously granted visas in exchange for the purchase of properties valued at €500,000 or more.

The Portugal Golden Visa program still exists. However, changes were made to the eligibility requirements in October 2023. The purchase of real estate and real estate related funds as qualifying investment options for the program were phased out of the program, but several attractive investment routes remain. This comprehensive guide, Portugal Golden Visa 2024: New Rules and Complete Guide, by our migration and residency partner Global Citizen Solutions, offers more information.

The Best Places to Buy Property in Spain

So, where do you buy property in Spain? The best place to buy property in Spain will depend on what you are looking for. From the cities of Barcelona and Madrid to the coastal areas and islands, when it comes to places to buy in Spain, the country has many exciting cities, beautiful landscapes, and stunning beaches – plus a fantastic cuisine. The best place to buy in Spain will vary depending on your needs.

Alicante and Costa Blanca on the east coast are particularly popular, as are the islands of Ibiza and Mallorca. The cheapest place in Spain to buy property is in the province of Toledo, municipality rich in history. In short, the best place to buy in Spain will depend on whether you are looking for a landmark townhouse, buzzing city, or coastal region and if you are moving to retire, move with children, or simply invest in the real estate market.

The Best Places to Buy Property in Portugal

In Portugal, Lisbon, the Algarve, and Porto real estate are the most popular locations for foreign buyers. The Silver Coast is also a beautiful location where many expats live, while the autonomous islands of the Azores and Madeira are stunning. The North, Center, and Alentejo regions are also moving onto the radar, where you should be able to find excellent properties in spectacular locations at a very reasonable cost.

Ask the Experts: Should I buy property in Spain or Portugal?

Is it a good idea to buy property in Spain? Or is Portugal the better option? If you are considering buying property in Spain or Portugal, get in touch with one of our property experts to talk over your case.

Goldcrest is a buyer’s agent based in Lisbon, Porto, and the Algarve. Equipped with local knowledge, exclusive networks, and international experience, we provide expert, impartial advice on real estate investments and how to buy property in Portugal. From scouting out the perfect property to property acquisition and beyond, we have you covered throughout the process.