Portugal - Economic Factors

There are many economic reasons why Portugal offers investors such a promising marketplace. Below are some of the key factors you should be aware of while doing your investment research.

Cost of living

Portugal boasts one of the lowest costs of living in the EU, although prices are slowly creeping up as Portugal regularizes its tax policies in line with the rest of the EU. Meanwhile, per capita income has risen from around half the European average to over 75% and this figure continues to rise. As a result, the cost of maintaining and managing your property is comparatively low. It is small wonder that Portugal has lured some 100,000 British second home owners and it retains its great popularity as an expatriate retirement haven.

Capital growth

Growth rates of around 10% per annum and rental yields of maximum 10% in key locations are entirely achievable in Portugal. Smart money is now going into new emerging markets such as the increasingly popular Silver Coast, just north of Lisbon where property prices are lower than in the more established resort areas and optimum capital returns are to be achieved.

Booming property market

Despite a relative slowdown in some resorts, the property market remains buoyant. Luxury new golf resorts are going up in the Algarve to supply a growing demand amongst the expatriate community for off-plan bargains. Meanwhile a gradual new trend for investment into new emerging markets within as yet lesser discovered areas of Portugal, with prices some 30% lower than on the Algarve, is now offering strong growth potential. As a result there are still many exiting opportunities to achieve worthwhile returns on investment in carefully selected locations, whether you choose the more mature market of the south coast or the emerging markets further north.

Low cost airlines

Portugal is well served by low cost airlines to any of its three international airports. This factor is forever boosting Portugal's strong tourist industry and welcoming increasing numbers of visitors and second home owners each year.

EU Grants

Generous EU grants for Portugal's rural economy are improving roads and other facilities all over Portugal, benefiting not only the agricultural sector, but also the foreigners buying rural properties and benefiting from quick and easy access to their destinations.

European Monetary Union

As a full member of the European Union since 1986, Portugal also joined the EMU in 2002, hence money transactions are made simple for many European purchasers and visitors to Portugal.


As a founding member of NATO, property purchasers are safe in the knowledge that Portugal is fully integrated into a system of international security.

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