A proven and secure property market, Portugal is one of the most popular destinations for people looking for somewhere to retire and international property investors looking to purchase a second home overseas or buy a property to let. In fact, it’s a comfortable marketplace for international buyers owing to the stability and transparency of the buying procedure and the fact that English is widely spoken. Portugal also has a lot going for it. Steeped in history, with a number of UNESCO world heritage sites, Portugal has much of cultural interest. The architecture and culture of the country has been shaped by Moorish and Oriental influences still evident today, particularly in Lisbon and Porto. The relaxed way of life in Portugal is also attractive, with festivals and fairs taking place in most towns and villages throughout the year.

Despite its relatively small size – it is just over 35, 670 square miles and has a population of around 10 million – Portugal is endowed with a diversity to rival any larger, more developed destination, from the sophisticated holiday resorts along the Lisbon and Estremaduran coast and the southern Algave to the rural areas of the Alentejo, the mountainous Beiras or Trás-os-Montes in the north, where the country is much less developed. Portugal is made up of beautiful varied landscapes, with its inland centre and northern areas characterised by rivers, forests and rich green valleys, contrasting with the beaches, cliffs and coves of its vast coastline and the arid plains, peppered with vineyards and olive and orange groves, of the Alentejo area.

Proven market
No wonder that this European gem attracts both holiday property investors and those seeking permanent residences. Portugal also lays claim to having 300-plus days of sunshine a year, the lowest crime rate in Europe, a low cost of living, and excellent beach and golf facilities, all within a short flight of other European destinations. In addition, although Portugal has seen a great swathe of construction in some areas, the construction density limit of eight percent in, for example, the Algarve means that efforts are being made to preserve the natural environment.

The Algarve
With 800km of coastline, attractive sightseeing opportunities and great golfing options, Portugal’s tourist season stretches into its cooler months. For those looking to buy to rent, the coastal areas and great summer weather entice the holidaymakers while the golf courses extend the rental season into the off-peak months, maximising rental returns. Indeed, golf is a major draw for many visitors and new residents. Increasingly a golfer’s paradise, the Algarve is home to more than 30 of Portugal’s 60-plus golf courses. In fact, its golf courses cover more surface area in relation to landmass than in any other European country. No wonder then that the Algarve region attracts 5.5 million tourists each year. The western Algarve, which runs 100km from Faro to Sagres, includes some of the region’s finest beaches, and top-of-the-range resorts, as well as sleepy fishing villages. For a snapshot of Algarve luxury, the Vilamoura Golf & Garden, which is situated in the popular town of Vilamoura, had its landscaped gardens designed by celebrity garden designer, Diarmuid Gavin. A purchase within Vilamoura Golf & Garden Resort – prices start from €515,000 for a two bedroom apartment – entitles the owner to membership of seven golf courses.

International visitors generally arrive at Faro airport, a short distance from the city centre with its Roman walls. In summer, the coast between Faro and Lagos attracts thousands of visitors, but you can easily escape the crowds. Inland are mountain towns and lush valleys. The Algarve contains four major wine regions, Lagoa, Portimão, Tavira and Lagos, which produce about six million litres annually of mainly red wine, but also white and rosé wines.

Natural assets
However, it is the wealth of jewels throughout the country that are diluting the property investment market away from the well-established Algarve market. Rural tourism is the buzzword in the Portuguese tourism market which is filtering down into the property investors market not only among those who are buying to let but also those seeking second or retirement homes. Upcoming destinations in Portugal include the more rugged Green Coast around Porto and the Silver Coast, north of Lisbon.

The Silver Coast offers some of Portugal’s most impressive and unspoilt beaches, and is much less developed that the Algarve, with blue-flag sandy beaches and exciting surfing opportunities. It is also home to historic villages and undulating hills full of olive groves and vineyards. Highlights include Óbidos, considered to be one of the jewels of Portugal’s national heritage with its narrow cobbled streets and elegant whitewashed buildings with balconies adorned with flowers. Óbidos has numerous restaurants, bars and cafes as well as a medieval feast and chocolate festival. Foz Do Arelho is another gem on the Silver Coast. Perched on the edge of the turquoise ‘Obidos’ lagoon this old fishing village is still the base for traditional fishermen in their flat-bottomed boats, and fresh prawn, clams and crabs are sold in the local restaurants.

This area, known as ‘the real Portugal’, is experiencing some development. The region’s business environment has become more dynamic too and with it investment in regeneration and construction of property has increased to meet the demands of the growing need for quality accommodation in the resale and rental markets. However, because of the country’s conservational approach to tourist developments, it is guaranteed not to lose its charm. Tapping into the trend towards cultural tourism and demand for locations that are more off the beaten track, complexes are being developed. Resorts complete with championship golf courses and five-star facilities are being built with less than half the density of many complexes on the Algarve, and prices start from as little as £100,000. Thanks to the A8 motorway, travelling times between Lisbon and the Silver Coast have been cut to under an hour.

Green Coast
Further north is the Green Coast, earning its name from its abundance of rich green vegetation. It stretches north of Porto, the country’s second largest city, right up to the Spanish border, and has a coastal road that spirals through breathtaking scenery, rivers and waterfalls. Because much of the area is protected under the Parque Natural do Litoral Norte, it is less intensively built up than many other coastal areas in Portugal. Like the Silver Coast it is home to many medieval towns and villages, and quiet resort towns such as Esposende, a friendly, low key resort with kilometres of sandy beach lined by sand dunes. The water here is clean and reputedly has health benefits as it is full of iodine. There are both deserted beaches and bigger, busier beaches, where surfing and watersports are popular pastimes. There are also plenty of opportunities for sampling some of the local food and wine – this area is where Vinho Verde is produced as well as being the birthplace of Port wine.

Property prices in this region are the cheapest in Portugal, the best bargains being found inland rather than on the coast. In fact, on both the Silver and Green Coasts property prices are generally around 30 percent cheaper than in the popular resorts of the Algarve. What’s more, while Portugal’s cost of living is in some places on a par with the rest of Europe, it is much lower in the rural areas. In addition, the country’s stable exchange rate, reduced inflation and decreasing interest rates are all good news for those seeking to invest in property there.

British interest
Another plus point for those seeking to invest in property in Portugal is that because of the large number of holidaymakers and retirees from Britain that flock to Portugal, English is widely spoken especially in the resort areas, and legal, financial and property agents are all accustomed to working in the English language or have translations of documents readily available. Another positive feature for investors is that Portugal’s growth as a tourist and property destination has attracted more flight connections, with Ryanair launching in, March 2010, 200 weekly flights from Faro, and Portuguese airline TAP increasing its services to France, Germany and Britain, the countries from which Portugal attracts most of its visitors. The country has a number of well placed international airports, conducive to the expansion of the property investment market: Faro airport serves the Algarve, Lisbon the Silver Coast and Porto airport the country’s northern towns and cities.

The economic crisis has affected Portugal as it has much of Europe but the drop in property prices has led many investors to take advantage of the cheaper prices. There has been particular interest from Britons looking to buy retirement or second homes. According to a survey by the National Statistics Institute, house prices in Madeira and the Algarve had risen by 0.4 percent and 0.8 percent respectively in October 2010, while nearly all other regions experienced a slight drop in property prices. Overall average real estate values in the country decreased by 0.6 percent in October 2010, compared to the previous month, and 1.3 percent compared with 2009.

There is no doubt that Portugal provides a solid investment opportunity. Property law and title are transparent and the fact that there is no inheritance tax and low rental income levies makes it an attractive regime to buy and manage property within. According to the Office of National Statistics, 5,000 Britons purchased property there in 2008 alone. Indeed, recent Mintel research shows that residential property abroad has outperformed all other investments in the last three years, including equities, gilts and commercial property. For anyone looking for property investment, Portugal offers plenty of opportunities.

Help investing
Graca Spratley is a small, established real estate firm with 20 years’ experience dealing with foreign clients. They are particularly proud of the quality and transparency of the personal care they offer to all their clients. The north of Portugal and the Douro Winemaking Region, notable for their unspoiled natural beauty, are excellent choices for anyone interested in investing in large tourism projects or in building holiday homes.

A striking feature of northern Portugal is the lush green hillsides that rise on either side of the main road from Porto to Valença, on the Spanish border, via Barcelos, one of the most popular routes taken by pilgrims on their way to Santiago de Compostela.

The beautiful city of Porto is considered the capital of the north, but the other district capitals of Braga, Bragança, Viana do Castelo and Vila Real are also cities traditionally of great interest to tourists. All are connected to Porto and its modern international airport by excellent highways and motorways, making travel throughout the region swift and hassle-free.

The main waterway in the north is the River Douro, which flows into the Atlantic at Porto from Spain in the east. Upriver, the magnificent terraces of the Alto Douro Winemaking Region, classified by UNESCO  as a World Heritage Site, rise on either side of this majestic river and mark the birthplace and home of world-famous Port wine.

The north also boasts several other World Heritage Sites, namely the historic centre of Porto, the historic centre of Guimarães and the Valley of the River Côa, the site of recently-discovered pre-historic rock art. Nearby, unusual rock formations and imposing mountains are to be found in the Peneda-Gerês National Park.

Contact
Web: www.gracaspratley.com.pt
Email: gspratley@gracaspratley.com.pt