Portugal will again be featured with a joint stand at this year’s EXPO REAL. The stand is coordinated by Lisbon’s investment promotion agency, Invest Lisboa, and brings seven companies from greater Lisbon to Munich. Joaquim Pereira de Almeida, editor of the Portuguese “Magazine Imobiliário”, tells us about the development of the realty sector in Portugal, the role of Lisbon and his assessment for the future.
Portugal could be a perfect case study in the real estate world. In fact, it was only in the mid-eighties that the foundations for the development of a modern real estate market began to be laid. Portugal’s entry into the EEC, its political stability and its strong growth potential attracted all kinds of foreign investors. The result: the yields were very high and all types of developments sprang up like mushrooms. In less than 10 years, there was a real revolution in real estate. Never before had so much been built in such a short time, and of such a good quality, as in the 1990s. Portugal came onto the radar screens of the international operators and remained there.
A complementary factor reinforced the trend: the staging in Lisbon of the World Exhibition, EXPO 98. The developers chose an area of the city which was very run down, and they did a good job: they didn’t just regenerate the site, but also developed an urban redevelopment plan for the region which included the creation of sophisticated infrastructure. When the exposition ended, a new city had been born, one that was modern and attractive, and which today is a new central area of the city and an important aspect for investors when thinking about investments.
One should also mention the huge growth of tourism all over the country, with the creation of dozens of new hotels which made Lisbon one of the most sought-after destinations for tourists at the time.
It all seemed to be going so well, and who knows what would have been if it hadn’t been for the world financial crisis in 2008 which pulled the rug out from under Portugal’s feet. Portugal had to call in the IMF and EU for an emergency bailout, and for four years the country was governed from abroad with unparalleled austerity policies. Real estate went into hibernation. Investment dried up and there was total stagnation.
But bad cycles don’t last forever, and from 2014 new positive signs began to be seen. Investors returned with such force that the main problem currently facing Portuguese real estate is the lack of new products to satisfy the growing demand. What’s been happening meanwhile with urban rehabilitation isn’t enough – those who have money want more. This is why I believe that the next few years will be very good, despite worrying signs caused by the United Kingdom’s decision to leave the European Union.
I am confident.