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May 14, 2023

Golden Visa Termination Will Have Minimal Effect on Portugal’s Residential

A limited impact on the residential market is expected to have the abolishment of the Golden Visa Program of Portugal.

Such estimations have been published in the recent analysis of the financial services company DBRS, SchengenVisaInfo.com reports.

“The end of granting new golden visas concludes a program that was developed in a difficult period for the country. The decision should have a limited impact on the residential market, as it was not a decisive driving force in terms of transactions, either in terms of volume or in terms of value for the country as a whole”, the company noted.

According to DBRS, there are several factors more relevant to explain the current trend of increasing house prices in this country, namely the shortage of new housing, international interest as well as economic recovery.

The analysis shows that residential property prices in Portugal have been increasing continuously since the first quarter of 2013.

“Since then, house prices have more than doubled…in recent years, a clear divergence has arisen, with prices for existing properties growing faster than those of new properties,” the analysis shows.

The report concluded that Portugal has a relatively old housing stock, which in the last few years has started to be refurbished with the advent of greater tourism-related inflows as well as a better economic environment.

The launch of the Residency by Investment Schemes in Portugal,  in addition to the end of the IMF financial assistance package as well as the increased relevance of tourism in Portugal’s economy, among others, contributed to the bottoming out of new construction activity in 2015.

“Nevertheless, in Portugal, the number of new, completed residential dwellings at the start of the century was approximately 90,000 per year, while data for 2022 shows that it is now significantly below that, amounting to circa 20,000 per year,” the analysis shows.

The figures provided previously by the country’s border agency SEF, from 2012 until today, a total of 11,921 residence permits were issued under the Golden Visa program, while the majority of them were through the acquisition of real estate or 10,874.

Citizens from the following territories benefited the most from Portugal’s Golden Visa Program:

  • China (5,304)
  • Brazil (1,198)
  • United States (607)
  • Turkey (568)
  • South Africa (525)

However, in spite of bringing a significant contribution to the country’s economy, on February 16, Portugal abolished this scheme which permitted foreign internationals to acquire residency if they made an investment in this country.

The decision came as part of the Mais Habitacao scheme to tackle the problem of housing shortage.

>> European Golden Visas – How to Get EU Permanent Residence by Investment