Updated: March 4, 2024

 

Lisbon, the largest city and capital of Portugal and the second oldest capital city in Europe, has become the ultimate destination for tourists, investors, digital nomads, and expats. This vibrant hub of Portuguese history and culture offers an unmatched blend of old-world feel and modern global community living.

In 2023, Lisbon was named Europe’s new tech capital by the European Capital of Innovation Awards. The award was created to reward European cities that boldly put policies in place supporting tech experimentation, boosting tech innovation, and pushing the boundaries of technology.

The city’s blossoming tech scene, economic stability, and growth have contributed to Lisbon’s rise as one of the best Western European cities to invest in property. Here, we will explore the current state of the Lisbon real estate market, the top investment opportunities, and predictions for the real estate market in the year to come.

The Current State of the Real Estate Market in Lisbon

Lisbon-neighborhoodBesides the recognition of the European Capital of Innovation Awards, according to reports by the Bank of Portugal, Turismo de Portugal, and the National Statistics Institute (INE), Portugal closed the 2023 financial year with 77 million overnight stays and €25 billion in tourist revenue, a growth rate of 10 percent and 37 percent growth, respectively.

The ever-growing touristic interest in Portugal is a profitable advantage for property investors who are looking to purchase a holiday home or investment property in the Portuguese capital city.

When it comes to Lisbon and the growing opportunities in the tech sector, this leads to an increase in the number of digital nomads and remote workers interested in working and living in Portugal. Lisbon offers a variety of property options for international investors looking to purchase investment properties and a growing expat and digital nomad community seeking short-term and long-term rentals.

In a recent housing market survey wrapping up insights about Portugal’s 2023 real estate market insights, Confidencial Imobiliario Director, Ricardo Guimarães, shared that despite the challenging housing conditions in the past, which saw a 20 percent decline in the number of real estate transactions, the market has steadied and recovered with a 2.5 percent increase in quarterly sales since the second quarter of 2023. These numbers reflect the constant growth and resilience of the Lisbon, Portugal, real estate market.

Property Prices in Lisbon

Lisbon has its own price range when it comes to property prices, when compared with the rest of the county. However, the growing expat community in Lisbon ensures property investors can look forward to promising Return on Investment (ROI).

In the table below, we have provided a comprehensive overview of the current average asking prices per square meter for houses in different Lisbon neighborhoods.

Location

Price Per Square Meter

Ajuda

€4,222

Alcântara

$4,368

Beato

$3,616

Benfica

$3,723

Campolide

$5,287

Carnide

€4,138

Lumiar

€4,360

Marvila

€3,687

Olivais

€3,330

São Domingos de Benfica

€4,180

Alvalade

€4,694

Areeiro

€4,277

Arroios

€4,745

Avenidas Novas

€5,953

Belém

€4,875

Campo de Ourique

€5,072

Estrela

€5,614

Misericórdia

€5,369

Parque das Nações

€4,795

Penha de França

€3,720

Sta Clara

€2,744

Sta Maria Maior

€4,712

Sto António

€6,267

S Vicente

€4,320

Rental yields in Lisbon

With Return on Investment (ROI) in consideration, average rental yields on investment properties in Lisbon currently sit at the percentages displayed in the table below:

Lisbon Neighborhoods

Current Rental Yield Percentage

Alcântara

5.4

Alvalade

4.2

Areeiro

4.5

Arroios

5.5

Avenidas Novas

3.9

Benfica

5.2

Campo de Ourique

5.0

Campolide

4.8

Estrela

5.4

Lumiar

5.1

Marvila

6.6

Misericórdia

5.2

Olivais

5.5

Parque das Nações

4.7

Penha de França

5.5

S Domingos de Benfica

4.7

Santa Maria Maior

5.6

São Vicente

5.3

Santo António

4.7

The top investment opportunities in Lisbon

Rental yields on investment properties in Lisbon, such as the current rental yield of 6.6 percent in Marvila, make buying property in the Portuguese capital one of the top investment opportunities in Europe. Besides residential property investments, there is a selection of sectors offering investment opportunities to foreign investors. These include the hotel and retail sectors, thanks to the booming tourism industry, plus new options such as co-working spaces to account for digital nomads.

A 15 percent increase in investment volume in the second half of 2024 is expected within the real estate market, according to CBRE insights and research. The Royal Institution of Chartered Surveyors (RICS) also reported that the Portuguese economy will gain momentum in 2024, spurred on by foreign investment and tourism in the country.

The Best Neighborhoods in Lisbon for Real Estate Investments

In the section below, we will explore Lisbon neighborhoods that offer the best property investment opportunities for investors interested in buying property in Lisbon.

Anjos

Anjos, a residential neighborhood popular with young professionals looking for an affordable area to settle in and is also one of Lisbon’s key expat neighborhoods.

This quaint neighborhood offers an incredible mix of cultures, property investment opportunities and a unique selection of entertainment and retail amenities.

Bairro Alto

Known to be one of the most vibrant neighborhoods in Lisbon, Bairro Alto offers great opportunities to investors looking to buy property for rental income. The area is celebrated for its exciting nightlife, restaurants, and multicultural community.

Baixa

Baixa is a central Lisbon location in close proximity to Alfama and the Castelo, and Chiado. Known as the suburb that offers the best retail experiences in the city, Baixa is an ideal location to settle given its easy accessibility to beaches in Cascais and Carcavelos.

Chiado

Famous for its cafes, tourist attractions, and unique architecture, Chiado is a lovely place to invest in or live. The suburb is in a central location and offers effortless accessibility to the rest of Lisbon and the metropolitan area.

Predictions for the Lisbon Real Estate Market in 2024

Lisbon-Real-EstateDespite a slight decrease in property purchases by foreign buyers and the 7.6 percent year-on-year increase in the House Price Index (HPI) reported in the third quarter of 2023 by the Portugal National Institute of Statistics, the overall outlook for the Lisbon real estate market is positive.

RICS Senior Economist Tarrant Parsons has predicted that despite interest rates being high at present, they are set to fall, creating favorable market conditions for real estate investments in the coming year. Additionally, property buyers who make strategic investments in the Portugal real estate can secure beneficial investments and great potential for ROI in the year ahead.