Redevelopment & Tourism Growth Drives Porto’s Property Market
The property market in Porto, Portugal’s second city and UNESCO World Heritage Site, is undergoing a resurgence as tourism expands and the city’s historical buildings are being redeveloped. Overseas buyers are starting to latch on to Porto’s appeal and potential as a holiday and residential destination, boosted by the availability of low-cost flights, good capital appreciation and high rental yields.
Property in Porto is experiencing some of the country’s highest capital appreciation at 9.7% y-o-y in October 2016*. Currently Porto property prices represent great value compared to other European cities and the rental yields are high due to the strong tourism numbers. The average price per square meter of a city centre apartment in Porto is just €1,680 versus €16,253 in London. Purchasers can still find a studio apartment in the city for about €80,000 or a two-bed renovated apartment for €210,000. Porto also has plentiful waterfront properties that enjoy amazing views over the Douro River.
Latest figures from 2016 show an 11.5% increase in tourism to Porto with similar levels expected in 2017. The government is gearing up for further expansion as this year the city’s airport will grow by 20%. An announced investment of €55m in the airport will increase the number of departures from 20 to 32 per hour, boosting the current 58 flights per week to London with Ryanair, British Airways and TAP.
The British have long been the biggest population of expats since they arrived for the port trade more than three centuries ago, and their influence is felt across the city. There are currently 66,720 foreign residents in the Porto Area. These numbers are growing every day due to the city’s natural beauty, cosmopolitan environment and open-minded atmosphere. An additional attraction is the fact that Portugal has one of the most competitive tax regimes aimed at attracting non-resident qualified professionals and high value-added activities worldwide.
In addition to the foreign interest, the local government is spearheading over 1,000 redevelopment projects and there are new coffee shops, restaurants and areas of interest all over the city and its outlying suburbs. Baixa, the historical centre of Porto, is gradually being transformed after years of neglect, thanks to the revision five years ago of tenancy laws – that controlled rents and meant landlords could not afford repairs.
To further contribute to the local economy and boost its medical sector, Porto has also put forward a bid to host the European Medicines Agency (EMA) after it moves from London post Brexit. A decision on the EMA’s new location will be released on the 20th November 2017.
Being the birthplace of Port and the gateway to the beautiful Douro Valley, Porto attracts a lot of wine tourism visitors who combine a city break to experience the cultural and historical sites, with a trip into the valley for wine and port tasting. Located by the sea, the climate in Porto is mild and pleasant. The average minimum temperature in Porto in the winter is 5º C and the average maximum temperature in the summer is 26º C. There are 220 sunny days a year and 7.7 daily sunshine hours on average.
There are also many outdoor activities such as jogging, canoeing, or surfing all year round in beautiful parks or the sea. White sandy beaches are only 7km away from the city centre, many with the EU Blue Flag. Moreover, Porto and the North of Portugal have numerous golf courses designed mostly by renowned international architects.