Overview of the real estate market of Greater Porto

Portugal's administrative structure is multi-layered. The territory of the state is divided into 18 districts, which in turn are divided into 308 municipalities. Located in the northern part of the country, the city of Porto is considered the center of the district and municipality of the same name.

At the same time, there are also larger administrative-territorial formations – urban agglomerations. There are 9 of them in total, including the Big Port.

The large Porto with a population of about two million people consists of 14 municipalities: Porto, Matosinhos, Vila Nova de Gaia, Gondomar, Espinho, Maya, Valonga and others. Many municipalities in the agglomeration significantly exceed Porto itself in terms of area and number of residents.

The Greater Porto subregion, in turn, is an integral part of the Northern Portugal region. 

Why is Porto growing in popularity among real estate investors?

Tourism

Porto is a tourist magnet on a par with Lisbon. The northern capital, as the Portuguese call this city, lies on the banks of the Douro River, and is washed by the Atlantic Ocean from the west. The climate here is pleasant; there is no extreme heat in summer and a fairly warm but windy winter. The long sandy beaches give happy moments to vacationers from all over the world.

But it's not just for the sake of the ocean that they arrive at the Port. The city is also interesting from a historical and cultural point of view. Not far from the mouth of the river is the well-preserved medieval district of Ribeira, which is entirely included in the list of UNESCO World Heritage Sites. Both in the Port itself and in the neighboring municipalities there are many ancient houses, temples, structures that tell about the rich history of these places.

Finally, many foreigners come here for the atmosphere. Flooded with tourists and street musicians, the vibrant, lively, cosmopolitan resort rarely leaves anyone indifferent. It is not surprising that Porto was recognized last year as the best city in the world for tourism by the World Travel Awards.

As the tourist flow to the Northern capital of the country increases, the number of investors in real estate and business projects is also growing.              

Business

Porto is one of the largest industrial and business centers in Portugal. The region has machine-building enterprises, a seaport, an airport, a large logistics complex, and a developed chemical, light, and processing industry.

On the hills of the Douro Valley, which stretches along the river, grapes are grown, from which the famous port and other wines are obtained.  

As experts in Portugal say, it is in the northern regions that the production of products that are more expensive in terms of cost and high-class in positioning is concentrated: wines, first of all, as well as olive oil, herbs, tea.

The Port is home to the headquarters of many large national and international companies, such as Amazon, Siemence. Moreover, the trend is that more and more foreign enterprises are seeking to open representative offices here. They transfer top managers here, bring their employees and recruit locals. Thus, the demand for offices and housing is steadily growing.

Interestingly, the universities of Porto have their own specifics; they are aimed at training effective personnel for business. Such areas as law and management are strong in local universities.       

Potential for growth

Initially, foreign investments were concentrated in Lisbon. This is due to the fact that the capital always has the advantages of a well-promoted brand. In addition, an international airport was opened here a few years earlier, and a new round of development began.

However, after real estate prices in Lisbon reached a certain peak, foreigners turned their attention to the Northern capital. Large financial flows have flowed into the Port to develop infrastructure and create tourist facilities. One thing pulled the other. A lot of real estate is being built in the Port now, and it is rapidly catching up with Lisbon.

There is another aspect related to the mentality of the Portuguese. They do not like and do not know how to advertise themselves. As a rule, purposeful steps are needed for success, and in this sense they are greatly helped by foreigners.

As the realtors note, you can choose the region of Portugal that you prefer to live in. But, from the point of view of return on investment, the Port is preferable.

Real estate prices in Lisbon and Porto differ by 40-50% in favor of the latter.

"Golden Visa"

There were more options for investing under the Golden Visa program in Porto than in Lisbon.

The scheme, which allows you to obtain a residence permit in Portugal when buying real estate in accordance with certain conditions, was very popular, but today it is already obvious that it will be canceled. Nevertheless, it is still possible to use it. 

The real estate market of Greater Porto

Trends

The demand for real estate in general in Portugal is high. According to realtors, prices have been rising by about 10% annually over the past decade (from February 2022 to February 2023 by 12.5%, according to the National Institute of Statistics). One of the reasons is the opening of the Golden Visa program in 2012, but, of course, it's not just about her.  

2018 was especially profitable for investors, when prices at the Port increased by 18%.

As for the rental market, rates, according to various estimates, have increased from 30 to 50% in 5 years, depending on the area and type of property. Finding a vacant apartment has become a real adventure for expats coming to Portugal from different countries. Renting an apartment, as a rule, is not difficult, since the demand is high.  

Types of real estate

Both urban and resort real estate are represented on the Porto market: villas on the coasts, apartments in multi-storey and low-rise complexes. A large selection of commercial facilities. These include, for example, shares in hotels and apartments.

Now the issuance of new tourist licenses has been suspended, so the demand for those apartments that already have this license has jumped. They have become, one might say, worth their weight in gold.

Commercial premises where cafes, restaurants, and boutiques can be opened are also in demand among investors. The tourist-oriented business is booming. 

New construction is actively underway in the Port and its satellites. Real estate in new buildings is more popular among foreigners. The Portuguese prefer owner-occupied housing. According to Idealista, the ratio of primary and secondary real estate offers in Portugal is about 20:80%.

The most expensive housing in Foz, Aldobar. More accessible areas are Bonfim, Paranhos. Vila Nova de Gaia is suitable for families with children. For rent to tourists – historical center: Bonfim, Baisha. Active development is underway in Matosinhos and Paranhos.

According to realtors, a significant proportion of transactions took place under the Golden Visa program. However, obtaining a residence permit was usually a concomitant goal (although in some cases the main one). Many buyers acquire, first of all, an asset to make a profit either by increasing its value or by renting it out. In addition, the number of families who want to move to the Port itself is increasing, and often to neighboring, quieter municipalities, and they need real estate for their own residence. There are also those who are looking for a holiday home.      

Municipalities and prices

The highest average price per square meter in the agglomeration is expected in the Port. According to Idealista, in February 2023 it amounted to 3274 euros per sq.m.

Traditionally, apartments with a view of the water, near metro stations, in areas with developed infrastructure are in high demand. It should also be borne in mind that Porto is a city with large elevation differences. A long walk, say, with a stroller can be problematic, so it is preferable to choose a property near a bus stop. Public transport in the city and between municipalities is very well developed – buses, metro trains run.  

The most affordable housing offers in the Port start from 150,000 euros. For such an amount, for example, you can buy a small one-bedroom apartment near the center in an area with developed infrastructure and a metro station. Long-term rental of such real estate costs 750 euros per month.