19 October/20 October 2019 ★ FT Weekend 3House Home
Portugal propertyPrices
in Porto have been risingannually at rates that
would have beenunthinkable a few years
ago, writesMelissa LawfordW
hen Gail Aguiar first
moved to Porto, the city
was very different. “I
was here at the bottom
of the cycle,” she says.
Aguiar, who runs a blog called Gail at
Large about expat life in Porto, moved
from Toronto in 2013, whenunemploy-
ment in Portugal was at just over 40 per
cent. “Things could not have been
worse,” she says. “Everybody was
depressed, everyone was leaving. Now
it’s gonein the other direction.”
The city is seeing an influx in overseas
buyers. In the past three years, the
number of homes sold to foreigners has
gone from one in 10 to one in three,
according to Gustavo Soares, a partner
at Engel & Völkers Porto.
Over the same period, Porto’s prop-
erty prices haverisen at a rate of 15-20
per cent each year, says David Moura-
George, director of Spain and Portugal at
Athena Advisors. According to Savills
data, at thestart of the year, newly-built
homes wereselling for €3,577 per sq m, a
19.3 per cent increase on the same
period in 2018, and almost double 2015’s
average of €1,851.
Today, the highest prices in the city
centre are in the riverfront São Nicolau
neighbourhood, where homes can sell
for€7,000 per sq m, says Moura-
George. The nearby neighbourhoods of
Cedofeita, Miragaia, Vitória and Sé are
also popular with international buyers,
he says, while Foz do Douro, a beachPorto, seen from the metal arch Dom Luís I Bridge on the River Douro— Getty Imagesdistrict at the mouth of the Douro river,
is “where all the rich families live”.
Christie’sis selling a four-bedroom
villa in Foz do Douro for €3.35m. More
centrally, Sotheby’s is selling a three-
bedroom house for €2.2m and Athena
Advisors is selling Palacete Cedofeita, a
development of five apartments and
eight new-build townhouses. A three-
bedroom flat costs €1.3m.
Back in 2012, Portugal was the P in
“Pigs” — the derogatory acronym refer-
ring to the European countries worst hit
by the debt crisis, along with Italy,
Greece and Spain. That year, the govern-
mentamended rental laws so that land-
lords could renegotiate tenant contracts
if they wanted to renovate— in effect,
giving them the ability to raise rents.
Buying to let became profitable again
and a wave ofrenovation began. Tour-
ism blossomed, bringingjobs and
money. “After the tourism comes the
buyers,” says Soares.
The national government was keen to
attract overseas investment. In 2012,Portugal introducedthe golden visa
schemethat allows foreigners to buy
residency(which after five years can
become citizenship) by spending
€500,000 on property. The aim was “to
make Portugal the ‘Florida of Europe’ ,”
says Pedro Pinheiro, partner and man-
ager at Sotheby’sPorto office.
The scheme has been particularlypopular with Braziliansescaping politi-
cal upheaval at home, says Pinheiro.
Such buyers, says Moura-George, now
account for 15 per cent of transactions in
the prime districts. Or, as Aguiar puts it:
“I can go into any shop and I will hear
Brazilian Portuguese.” The visa scheme
has alsoattracted buyersfrom Turkey,
Israel and the US, says Soares, whofindPORTO
Douro
RiverPorto CathedralSéCedofeitaMiragaia
Dom Luís I BridgeFoz do DouroVitóriamaps4news.com/©HERE kmPORTUGAL
Porto a cheaper alternative to Lisbon.
The rise of short-term rental sites ash
alsolifted property prices, agents say.
According to data from AirDNA, the
number of Airbnb listings in Porto has
risen from 1,642 in August 2015, to
6,543 in August of this year.
Some locals, faced with competition
from investors, have been priced out,
which has led to small-scale protests
against short-term rentals. In July, the
Porto governmentintroduced a six-
month suspension onnew short-term
rental licences in the historic city centre.
“A lot of the city centre is foreign-
owned [nowadays],” says Aguiar, whoc
concedes that the local economic
revival has not benefited everyone. “If
you were unemployed during the crisis
and now you have work, that’s great,”
she says, “but if you can’t afford your
own apartment, you’re kind of back
where you were.”i/B U Y I N G G U I D E
Buyerspay 6 per cent of the sale price in
transfer tax, 0.8 per cent in stamp duty
and about 1 per cent in registry and legal
fees. Estate agent ees are paid byf sellers
House prices in Porto areabout 40 per
centbelow those inLisbon
Homeowners pay an annual Municipality
Tax, which is typically 0.4 per cent of the
property’s fiscal value
Profits from rental income e taxed at aar
rate of about 28 per centWhat you can buy for...
€500,000 three-bedroom terracedA
house in the city centre
€1.5m new-build, three bedroomA
apartment near the city park
€2.5m four-bedroom house in FozA
More atpropertylistings.ft.comIt’s all uphill
(Below) Anazulejo tiled
wall; (right) three-
bedroom house, €2.2m
etty Images; Sotheby’sGOCTOBER 19 2019 Section:Weekend Time: 16/10/2019- 17:47 User:elizabeth.robinson Page Name:RES3, Part,Page,Edition:RES, 3, 1