Portugal is favoured by buyers across the world for its sunny climate and affordable cost of living, but mainly for its lifestyle. Portugal has so much to offer.
Benefits of owning property in Portugal
Low cost of living
Generally, the cost of living in Portugal is low compared to many other countries, even in the cities. In 2024, the Property Guides Cost of Living Overseas Index found that a shopping basket of everyday items cost as much as 26% less in Portugal than it did in the UK.
Compared to prices in 12 other countries, including Spain, France and the UK, Portugal was revealed as the third-most affordable place to live in 2024, coming behind Italy and Spain, which took first and second place.
Read more in the Cost-of-Living Index today.
Climate and natural beauty
For those seeking a sunny lifestyle, Portugal is a haven. The Algarve region boasts hundreds of kilometres of sandy beaches. To match that, the region also has a range of beachfront and coastal properties to satisfy the needs of international beach-lovers.
Portugal is also known for its natural beauty. From the lush greenery of the Azores and Madeira to the dramatic Algarve cliffs, Portugal offers diverse landscapes. Highlights include the Douro Valley, a UNESCO-listed site in Portugal known for its scenic river and terraced vineyards. Sintra is a fairytale-like town near Lisbon, and Ria Formosa is a coastal lagoon in the Algarve.
Well connected
Another major benefit of buying in Portugal is that it is a well-connected country. There are three main airports at Porto, Lisbon and Faro, offering easy access to the country all year. Some routes are seasonal, but plenty run year-round (unlike to many Mediterranean destinations).
Welcoming community
The Portuguese and British have been political and military allies since the 14th century. And today the friendship continues. There are welcoming expat communities in the country, but the Portuguese themselves are very welcoming to newcomers. You’ll never be too far from a friendly face or a conversation in English, especially in regions like the eastern Algarve but also in Lisbon, Porto and Madeira.
North and South America also has strong connections with Portugal, with a common language with Brazil and plenty of Americans and Canadians now owning homes in Portugal.
On the other hand, if you want to immerse yourself 100% in Portuguese culture, there are plenty of locations inland where there are fewer foreign residents.
For guidance on settling in, download our free Buying in Portugal guide
Lifestyle
The lifestyle varies as you travel through Portugal. The North is characterised by lush countryside, so there’s less time to get caught up in the hustle and bustle of the modern-day world and more time to get back to nature and take each day as it comes.
For those who prefer fast-paced living, Portugal’s capital, Lisbon and tech hub, Porto, fill the void. Lisbon is a dynamic city with lots to offer. It attracts lots of international capital and there are new developments popping up each week.
Porto lies on the Douro River and is fast becoming a hub for European technology companies and start-ups.
For those seeking a sun-soaked lifestyle, close to the beach and local amenities, the Algarve has everything you could possibly need. Golf enthusiasts flock to the Algarve for its world-class golf courses while active residents enjoy water sports at the region’s many beaches.
Investing in Portuguese real estate
In recent years, Portugal has become a hotspot for international property investors. A lot of its success was down to the beneficial golden visa scheme, which allowed for residency via real estate investment. However this golden visa route recently came to an end for residential property buyers.
There are, however, other golden visa routes that grant residency vis investment in the Portuguese economy. Find out more, today.
Real estate prices in top cities across Portugal have held up, attracting foreign buyers from all four corners of the world.
Average rental returns
As of mid-2024, the average rental yield in Portugal was 5.5%.
Cities with the highest rental yields include Sétubal (6.51%) and Porto (5.48%).
Like many other European countries, Portugal is undergoing some legislative changes as the government attempts to control the over-supply of residential property for short-term tourist lettings, but it is still possible to secure a rental home in most locations, subject to the correct license.
Short-term lets are limited in some areas, such as Lisbon and Porto, however in more rural areas, it’s entirely possible to obtain a letting license.
Should you wish to let out your property in Portugal, it is important to consider your fiscal responsibilities, such as tax and ongoing maintenance fees to gain an accurate picture of what it’ll cost you to maintain. For guidance, we recommend you speak to a tax specialist.
Are there any reasons not to buy in Portugal?
Potential “cons” of buying in Portugal are few and far between.
Many buyers in Portugal only focus on the use of their properties in summer, but it’s important to consider how it fares in other seasons if you plan to use it year-round. For example, buying a beachfront home in the Algarve might seem idyllic in winter, but are you prepared for the tourism influx in summer?
Retirees may be worried that climate change could make life too warm in summer. Temperatures in the Algarve hit a record-breaking 40°C in the summer of 2022, but average around 29°C in the height of summer. If that’s a worry, consider Madeira, which is cooled by Atlantic breezes.
For those investing in Portugal, while a repeat of the global financial crisis seems unlikely, it would be wise to properly consult with a wealth manager or independent financial advisor to best assess your investments as a package.
