Dollar-powered North Americans and relocation-focused Brazilian buyers are looking for modern houses with unusual dimensions in Portugal. Is the market adapting to meet their needs?


Since Lisbon began to conquer the international stage, its popularity has not stopped growing, attracting an increasingly diversified number of foreigners who choose to start a new life in the city.

They come in search of a new lifestyle and the Portuguese capital offers one like no other with a mild climate, proximity to the coast, security, a very appealing quality-price ratio compared to its European counterparts and high standards of education, health and real estate.

"And that’s not forgetting Lisbon’s cultural, architectural and gastronomic wealth as well as the hospitality of the Portuguese and our willingness to speak the language of those who come from abroad," comments David Moura-George, Portugal Director at Athena Advisers.

Portugal’s growing reputation as a business hub and the possibility of working remotely anywhere in the world further reinforce this trend and the findings from SEF confirm this. At the end of 2021, there were 698,887 foreign citizens holding a residence permit in Portugal, 5.6% more than the previous year and this number has been growing year on year since 2015.

It is therefore not surprising that Lisbon occupies a prominent position in the European residential market, as more and more foreign families choose to relocate to Portugal.

As expected, the relocation of international families to Lisbon has intensified the demand for homes to buy or rent, particularly in the prime segment. Athena Advisers, which operates exclusively in the prime property sector where international clients account for 95% of demand, has seen increasingly strong demand, especially for large family properties in the most central and desirable areas of Lisbon, like Estrela, Lapa, Príncipe Real and Chiado, where demand far outweighs supply.

This situation is not new and affects the whole market, but in recent times international demand has reached new highs. This demand is predominantly fuelled by North American and Brazilian buyers. "In 2021 these buyers represented 30% of our sales and this year it has risen to 71% with relocation being the sole motivation behind all of the transactions carried out this year," adds Moura-George. "The dollar’s growth on the euro is the force behind many American purchasers and with the Brazilians, it is the continued desire to transfer their wealth to a stable Europe."

In just over 18 months, USD buying power in Portugal has increased by 24%, with $1m buying €810,000 in January 2021, compared to today’s €1,011,193.

Once again, SEF data supports this: in 2021 there were around 7,000 North Americans living in Portugal and in the space of a decade the number has more than tripled, with Californians leading the way.

With record demand, it is only a lack of supply that is slowing down the growth of the prime property market in Lisbon, a market that could be even more significant. This lack of stock has caused prices to rise and it is estimated that prime property prices will increase by 4.3%, on average, throughout Portugal this year (Savills Impacts Report 2022).

Even if the shortage of quality products has long been evident, the type of demand from these new customers (North Americans and Brazilians) has made it even more prominent. Unlike the French, who love the charm of renovated buildings in historic areas, North American and Brazilian buyers are rarely enchanted by this type of product. This is because they mainly want spacious, modern four or five-bedroom properties with plenty of light, high ceilings, outdoor living space and home automation. Budgets for these sorts of properties can easily reach €5m.

This is a niche market with a minimal supply and requirements that are not easy to find since culturally the Portuguese and European market is not used to developing houses with these dimensions and characteristics.

Inevitably, demand is shifting outside the city of Lisbon. The Lisbon-Cascais axis and the Ericeira area are destinations with enormous potential to invest in the development of new-build real estate projects which offer the space and characteristics required by this new profile of buyers. The proximity to the sea and beaches, the excellent surfing opportunities, the cosmopolitan yet quieter atmosphere and being only half an hour from the capital are some of the greatest assets of these locations. Within Lisbon, the Alcântara area still has much to offer and properties suitable for renovation, and its laid-back lifestyle by the river also plays to its advantage.

In addition to being able to meet this new demand and drive growth in the prime residential market, these types of properties are great investments because they are less affected by cyclical market fluctuations, with prices falling by only 5% to 10%. Therefore, despite their higher prices, they are more liquid and safer investments.

David Moura-George
Managing Director of Athena Advisers Portugal