How Do Portugal and Spain Continuously Perform Well in Real Estate?

Almost immediately after the global financial crisis of 2008, Portugal and Spain started to outperform Europe with their real estate sector. Although the crisis hit these countries also, property market of the Iberian Peninsula kept the economy intact. After a decade of growth, experts constantly argue if this trend will continue, and the general consensus is that it will in fact continue in 2020. According to the CEO of the EPRA (European Public Real Estate Association), Dominique Moerenhout, Portugal and Spain “have many investors in line”. The general manager of BNP Paribas Real Estate Spain, Ignacio Martinez-Avial also shares the feeling and argues that “both countries will continue to attract investors”.

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Due to their shared success and parallel performance charts, Spain and Portugal have started to be evaluated as a single entity within the boundaries of real estate. These two countries and their biggest cities (namely Madrid, Barcelona, Lisbon, and Porto) continuously outperform other European metropolitan cities. But how exactly they do that and what are the reasons behind the ever-growing investor interest in Portugal and Spain?

Business Friendly Economic Strategies

Both Portugal and Spain provide investors with desirable financial schemes which inevitably lure investors into the country. People who want to do business find the policies of the Iberian countries very attractive. Aside from the highly advantageous geographic location these countries share that perform as pivotal business hubs within close proximity to many major cities, Portugal and Spain present consistent figures of growth in terms of real estate and economic stability. In the tumultuous economic climate of the globe, Europe performs around 1 per cent growth yearly; whereas Portugal and Spain consistently push towards 2 per cent. The experts claim that this scenario will not change in 2020.

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Tourism is Another Driving Factor

Another source of income Portugal and Spain share is tourism. In 2019, these countries welcomed 106 million tourists combined. While Portugal performed a 7.5 per cent increase, Spain showed a more modest growth of 1.1 per cent. With its direct positive impact on property market, vibrant tourism of Portugal and Spain is another incentive for foreign investors.

Making Profit through Real Estate Investment

Thanks to Portugal’s and Spain’s Golden Visa programs, foreign investors find it very convenient to buy property in one of these countries in exchange for residency, and ultimately, citizenship. Apart from its undeniable attractiveness as a route towards European Union membership, real estate markets of Portugal and Spain also provide investors with great opportunities for profit. As a clear example, in the last 5 years, the office properties in Barcelona increased their value by 50 per cent and in Lisbon by 37 per cent. Although residential properties are likely to yield smaller returns, the growth is consistent and still very profitable.