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Lisbon is not portuguese, it is of the World

The economic globalisation of the last decades has changed the competitive paradigm of large cities, to play a more important role than their own countries. Today, Lisbon is a global city that competes with other large cities in the global sphere, becoming – however much it costs us – less Portuguese, more European, more worldwide.

Boom do turismo em Lisboa

This trend began with the globalisation of goods and services. For many years since, it has no longer made sense to travel abroad to shop, as the same shops which one can find in London or Paris can also be found in Lisbon (of course there are some differences, but this is just to illustrate the idea). Multinational services also have established a physical presence in all the large global cities.

Presently, we see the globalised movement or relocation of people, as we would want. The European Union created the free movement of people and goods, but this was delayed until European citizens took advantage of internal movements, such as the possibility of studying in another city, working for some years abroad, or even taking advantage to start a business in a new destination where talent abounds, and with a cheaper and better climate. For a long time, we were bound by physical constraints – a thing that makes little sense today.

Lisbon is currently playing this chess game, and competes (and collaborates) with other global cities like Madrid, Barcelona, Berlin, Paris, Milan, London, Amsterdam, Prague, Vienna, Copenhagen, Stockholm, etc… Competing at the level of attraction of start-ups, with its world-quality hubs, of students, for its excellent Business Schools, of conferences benefitting from excellent infrastructure and hoteling capacity, of tourism which gets high-end cuisine at reasonable prices, excellent festivals with top-level artists, a cosy city with nice people, excellent atmosphere, and of course, competing at the level of real estate investment.

The effect of this is transforming the city centre of Lisbon into a place where foreigners are more and Portuguese people are fewer, where one hears more English and other foreign languages than Portuguese. This phenomenon already exists in other global cities, perhaps delayed in reaching Lisbon.

Independently of whichever value judgment, one makes about this situation – and it is not our mission to do that here – this is the reality to which we must adapt and define the best strategies to help our clients get the best results.

In light of this new framework, when we analyse the evolution of real estate prices in the centre of Lisbon, we have to analyse them in comparison to other global cities, and not relative to the “Portuguese” Lisbon of the past and the reality of the country.

We can no longer think of a reality dominated by Portuguese couples who buy houses to live in the city centre, because, whether one accepts it or not, that is no longer the reality, and most likely will never be again.

The present reality is that of investment funds buying assets for rehabilitation and for transformation into hotels, offices and residences of premium quality, to sell to sophisticated clients, who in turn evaluate whether to invest in a property for rent in Lisbon, Barcelona or Amsterdam. They are the foreign clients who want to buy a house in Europe and look out for prohibitive prices in Paris, London or Milan, and get in Lisbon a premium quality apartment for a fraction of the price while being just a 2 hour and 30-minute flight distance from these cities with direct flights every one hour. They are the small-time investors from countries in fragile politico-economical situations, like Turkey, Brazil, South Africa some Asian countries, etc. who want to have a plan B in Europe, where they could go in case things get out of control while benefiting from the Golden Visa programme. They are the retirees from the north of Europe, who have discovered the advantage of living in a nicer climate, with excellent service offerings for health, top cuisine and recreation, and increasing the liquidity of their retirement thanks to the Non-Habitual Resident programme.


On average, for the entire Urban Rehabilitation Area (URA) in Lisbon, prices increased 6.6% on a quarterly basis (between the 1st and the 2nd quarter of 2017) and 23.5% on a annual basis (between the 2nd quarters of 2017 and 2018). These figures compare with 14.1% and 26.8%, respectively, in Market Snapshot 2017 (covering full year of 2017).

The Lisbon parishes with the best quarterly performances were: Arroios (+28,5%), Estrela (+19,6%) e Santa Maria Maior (+12,9%).

At the level of the annual variation (comparison between 2nd Quarters of 2017-2018), the best performing parishes were the same, only with a change in the 2 first positions: Estrela (+51,7%), Belém (+46,4%) e Avenidas Novas (+34,9%).

The average price in URA was 4.666 € € on a quarterly basis and 4.346 € on a annual basis. It should be noted that this difference is due to the effect that on a quarterly basis it is considered only the average of the quarter, and on an annual basis, the annual average. The fact that the highest value is the quarterly is due to prices increasing throughout the year. 

The parishes with higher prices per sqm are: 1) Santa Maria Maior (5.996 €), 2) Misericórdia (5.424 €) e 3) Estrela (5.272 €). When we compare with Market Snapshot 2017, it’s worth mentioning that Santo Antonio (Av. Liberdade area) felt from #1 to #5 in the ranking of price per sqm.

The average price of the premium segment for the URA is 8.341 €, ranging from 5.053 € in Alcântara to € 9,979 € in Santa Maria Maior. If we divide URA into 3 Tiers, we can summarize our search for the average and premium 2-segment quality in the following table:

Tier 1 – Estrela, Misericórdia, Sta. Maria Maior5.200 – 6.0008.100 – 10.000
Tier 2 – Arroios, Avenidas Novas, Campo de Ourique, Sto. António4.450 – 4.8006.150 – 8.450
Tier 3 – Ajuda, Alcântara, Belém, S. Vicente3.250 – 4.3005.050 – 7.100
Prices per sqm in Lisbon in 2018

From the lowest point during the crisis of 2012, prices in Lisbon grew 85.8% in the premium real estate segment and 79.3% in general average, which means that the premium segment grew faster than the average, which supports the conclusions which we shared in the previous chapter, in our perspective on the real estate market.

When we extended the analysis to other municipalities in the district of Lisbon, with more international demand, Oeiras, Cascais and Sintra, it was concluded that the price increase was more relevant in Lisbon, for the reasons explained in the previous chapter.

Investors should view prices per square meter as merely indicative, as they do not fully reflect what is happening on the ground, particularly for new developments that are about to be launched and that will influence price dynamics. We advise you to consult us for a discussion of these issues.

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