The luxury real estate market is doing well and is recommended, even if the pandemic and the war in Ukraine have forced a redefinition of strategies. In an interview with Villas&Golfe, Magarita Oltra, regional manager of Engel & Völkers Portugal, one of the country’s leading real estate companies in the premium segment, makes an assessment of these recent turbulent years and talks about what might happen in the near future. From the exponential growth of investors in Comporta, to the increase in the built-to-rent market in Lisbon and Oporto, and the new Golden Visa rules, which have already started to bring investment beyond the coastline. There are major real estate projects underway, and one can feel the excitement in the air with the new supply opportunities.
What are the main areas of Portugal where E&V has the greatest choice of real estate and which are the most sought after by investors, both national and foreign?
Our selection is directly aligned with our growth strategy in Portugal. Our first commitment in the country was to the Lisbon region and the Algarve, concentrating our presence in areas where there was greater international demand that recognises our brand. That is why we have such a strong presence in the Algarve region with eight agencies. The Lisbon-Cascais-Estoril region and more recently with exponential growth over the last five to six years, Comporta and Oporto.New areas include: the coast north of Lisbon, where there is a great increase in demand by Portuguese and clients from northern Europe, who are won over by the mild climate and sun, but not so hot, because it is a calmer area and where the value of the investment is lower. Also in Braga, where the strong entrepreneurial culture, through start-up programmes, SME network and the investment by major foreign companies has been a boon for real estate business. Braga is also interesting for foreign companies due to its favourable location in the north of Portugal. From the real estate point of view, property prices are comparatively low and demand, for high quality properties for residential and tourism purposes, is on the rise.As far as demand is concerned, the nationalities that have been buying are more or less the same, depending on the area: Portuguese, French, Belgian, German, Swiss, English, Chinese, and recently, Americans have joined the list, with an increase in demand.
What are the motives pushing buyers to purchase property in Portugal?
Portugal is a country with great potential, one of the main tourist destinations in Europe, with a mild climate, while offering excellent quality of life. The country will continue to be a favoured destination for investors, both foreign and national, as there are still various areas of the country where luxury real estate can be developed, with greater priority given to more isolated housing, or even areas under great development, such as Comporta, or yet to be developed, such as the Costa Oeste, which continues to attract investors.
«Portugal is a country with great potential, one of the main tourist destinations in Europe»
The pandemic did not rock the luxury real estate market. It seems that not even the war in Ukraine is. How can this be justified?
The pandemic also brought difficulties, as in almost every sector. At first it put an end to the upward trend in buying and selling transactions in the luxury market, which consequently created greater dynamism in the rental market. In a second stage, it gave rise to new opportunities, as the demand criteria of our domestic and foreign clients moved to primarily outside urban centres and with outdoor space.Now the war situation also brings changes to the real estate market, where deals have become stagnant and there are specific purchasing restrictions, but overall, it has not stopped transactions. On the other hand, it has increased rentals where we have at the moment a lack of properties.
In summary, the premium segment has proved to be highly resilient and able to adapt and respond to new challenges. We believe that investors will continue to invest in Portugal, as shown by the fact that property prices did not fall during the pandemic, unlike other parts of Europe. The fact that the construction sector has never stopped and that there are major ongoing real estate projects, which are now coming onto the market, opens new opportunities for our property portfolio.
In the specific case of Portugal, what makes the country so attractive to foreign investors?
Golden Visas were, until the end of 2021, an important incentive that allowed investors to enjoy various advantages and which increased the value of properties. The new Golden Visa rules has limited residential investment, but has opened new opportunities in the commercial area, where investment has already started to grow. The new Golden Visa rules have already started to bring investment beyond the coastline, as was the government’s intention, and will bring growth in the interior areas. On the other hand, the increase in the built-to-rent market in Lisbon and Oporto brings movement to the rental sector, where before there was no product, and respond to the increase in demand in this segment.We also have other measures such as tax benefits for Non-Habitual Residents, which attract foreign investment, but not forgetting the characteristics of the country, the fact that it is one of the safest in the world, its excellent location, the climate and the typical hospitality of the Portuguese, are also factors that lead international buyers to invest here. It is a country with great potential, one of the main tourist destinations in Europe, with a mild climate and offering great quality of life. I believe that the country will continue to be a favoured destination for investors, both foreign and national, as there are still various areas of the country where quality real estate can be developed, with priority given to more isolated housing.
«The new rules for Gold Visas have already begun to bring investment beyond the coastline»
How many ‘private office advisors’ does E&V have working in Portugal and the rest of the world?
Engel & Völkers Private Office was created to respond to the specific needs of clients with high-value and often multi-market real estate portfolios. Private Office Advisors provide the level of expertise and discretion that this client base requires. Their goal is to earn trust and build a relationship that goes well beyond a single transaction. The number of global Private Office Advisors (PO) exceeds 180, and in Portugal they are represented by one person in Lisbon, who centralises PO services.
In 2021, Engel & Völkers closed 90% more deals in the high-end property segment with prices above ten million Euros, compared to the previous year. What are the prospects for 2022?
The start of the year is proving to be very positive in number of transactions and also in value. We are very optimistic about the growth for 2022 and we think it will be even better than our record year of 2021. In the specific case of Portugal, transactions of those values are very occasional.
Does Portugal represent an important slice of that turnover?
With regard to geographical distribution, the greatest growth in revenues comes from the USA, which generated 544 million Euros in commissions, with Spain, Portugal and Andorra recording a 77% increase in revenues and Italy up 55%. It is important to highlight the growth that Portugal is having with €168 million in premium property brokerage volume, which made 2021 the best year ever for Engel & Völkers Portugal. The overall intermediation volume in 2021 by the German multinational here rose 61.3% compared to 2020 and the overall value of transactions rose 75%, with the average price of the properties transacted exceeding 510,000Euros, 8.6% more than in the previous year. Engel & Völkers believes strongly in the potential of the Portuguese market and has been investing significantly in the training of consultants, technological development and the growth of the franchisee network in premium areas of the country.
What are the main areas of Portugal where E&V has the greatest choice of real estate and which are the most sought after by investors, both national and foreign?
Our selection is directly aligned with our growth strategy in Portugal. Our first commitment in the country was to the Lisbon region and the Algarve, concentrating our presence in areas where there was greater international demand that recognises our brand. That is why we have such a strong presence in the Algarve region with eight agencies. The Lisbon-Cascais-Estoril region and more recently with exponential growth over the last five to six years, Comporta and Oporto.New areas include: the coast north of Lisbon, where there is a great increase in demand by Portuguese and clients from northern Europe, who are won over by the mild climate and sun, but not so hot, because it is a calmer area and where the value of the investment is lower. Also in Braga, where the strong entrepreneurial culture, through start-up programmes, SME network and the investment by major foreign companies has been a boon for real estate business. Braga is also interesting for foreign companies due to its favourable location in the north of Portugal. From the real estate point of view, property prices are comparatively low and demand, for high quality properties for residential and tourism purposes, is on the rise.As far as demand is concerned, the nationalities that have been buying are more or less the same, depending on the area: Portuguese, French, Belgian, German, Swiss, English, Chinese, and recently, Americans have joined the list, with an increase in demand.
What are the motives pushing buyers to purchase property in Portugal?
Portugal is a country with great potential, one of the main tourist destinations in Europe, with a mild climate, while offering excellent quality of life. The country will continue to be a favoured destination for investors, both foreign and national, as there are still various areas of the country where luxury real estate can be developed, with greater priority given to more isolated housing, or even areas under great development, such as Comporta, or yet to be developed, such as the Costa Oeste, which continues to attract investors.
«Portugal is a country with great potential, one of the main tourist destinations in Europe»
The pandemic did not rock the luxury real estate market. It seems that not even the war in Ukraine is. How can this be justified?
The pandemic also brought difficulties, as in almost every sector. At first it put an end to the upward trend in buying and selling transactions in the luxury market, which consequently created greater dynamism in the rental market. In a second stage, it gave rise to new opportunities, as the demand criteria of our domestic and foreign clients moved to primarily outside urban centres and with outdoor space.Now the war situation also brings changes to the real estate market, where deals have become stagnant and there are specific purchasing restrictions, but overall, it has not stopped transactions. On the other hand, it has increased rentals where we have at the moment a lack of properties.
In summary, the premium segment has proved to be highly resilient and able to adapt and respond to new challenges. We believe that investors will continue to invest in Portugal, as shown by the fact that property prices did not fall during the pandemic, unlike other parts of Europe. The fact that the construction sector has never stopped and that there are major ongoing real estate projects, which are now coming onto the market, opens new opportunities for our property portfolio.
In the specific case of Portugal, what makes the country so attractive to foreign investors?
Golden Visas were, until the end of 2021, an important incentive that allowed investors to enjoy various advantages and which increased the value of properties. The new Golden Visa rules has limited residential investment, but has opened new opportunities in the commercial area, where investment has already started to grow. The new Golden Visa rules have already started to bring investment beyond the coastline, as was the government’s intention, and will bring growth in the interior areas. On the other hand, the increase in the built-to-rent market in Lisbon and Oporto brings movement to the rental sector, where before there was no product, and respond to the increase in demand in this segment.We also have other measures such as tax benefits for Non-Habitual Residents, which attract foreign investment, but not forgetting the characteristics of the country, the fact that it is one of the safest in the world, its excellent location, the climate and the typical hospitality of the Portuguese, are also factors that lead international buyers to invest here. It is a country with great potential, one of the main tourist destinations in Europe, with a mild climate and offering great quality of life. I believe that the country will continue to be a favoured destination for investors, both foreign and national, as there are still various areas of the country where quality real estate can be developed, with priority given to more isolated housing.
«The new rules for Gold Visas have already begun to bring investment beyond the coastline»
How many ‘private office advisors’ does E&V have working in Portugal and the rest of the world?
Engel & Völkers Private Office was created to respond to the specific needs of clients with high-value and often multi-market real estate portfolios. Private Office Advisors provide the level of expertise and discretion that this client base requires. Their goal is to earn trust and build a relationship that goes well beyond a single transaction. The number of global Private Office Advisors (PO) exceeds 180, and in Portugal they are represented by one person in Lisbon, who centralises PO services.
In 2021, Engel & Völkers closed 90% more deals in the high-end property segment with prices above ten million Euros, compared to the previous year. What are the prospects for 2022?
The start of the year is proving to be very positive in number of transactions and also in value. We are very optimistic about the growth for 2022 and we think it will be even better than our record year of 2021. In the specific case of Portugal, transactions of those values are very occasional.
Does Portugal represent an important slice of that turnover?
With regard to geographical distribution, the greatest growth in revenues comes from the USA, which generated 544 million Euros in commissions, with Spain, Portugal and Andorra recording a 77% increase in revenues and Italy up 55%. It is important to highlight the growth that Portugal is having with €168 million in premium property brokerage volume, which made 2021 the best year ever for Engel & Völkers Portugal. The overall intermediation volume in 2021 by the German multinational here rose 61.3% compared to 2020 and the overall value of transactions rose 75%, with the average price of the properties transacted exceeding 510,000Euros, 8.6% more than in the previous year. Engel & Völkers believes strongly in the potential of the Portuguese market and has been investing significantly in the training of consultants, technological development and the growth of the franchisee network in premium areas of the country.
