Southern Europe has been dubbed a 'bright spot' after the real estate market in Portugal, Spain, and Italy reached a record-high investment of €31.7 billion in 2022. The most significant increase was registered in Portugal.
The record levels of capital transacted in Southern Europe – a 36% increase on the previous year, while total investment in Europe decreased by 23% – were reported by Savills in a recent report.
The region outperformed the rest of Europe by reaching almost €32 billion in investment, with Portugal seeing the highest year-on-year growth at 67% (€3.3 billion). Spain followed, at 39% (€16.6 billion), and Italy at 26% (€11.8 billion).
According to the real estate investment consultancy, the countries' high-performing year was the result of the return of domestic consumption post-Covid and being more insulated against energy price hikes compared to the rest of Europe, among other factors.
Following the record year, experts such as Moody's believe prices will adjust to reflect the current macroeconomic environment and that Southern Europe will lose some of its attractiveness.
The end of the Golden Visa scheme will no doubt impact the volume of investment in 2023, while the recently introduced Digital Nomad Visa is expected to affect the number of available properties on the market and contribute to pushing up rents.
However, according to Carlos Ruiz-Garma, director of European Capital Markets at Savills, "While we don't expect another record year for the region in 2023, some market fundamentals will remain solid and will continue to attract investors".
Wondering if investing in Portugal is the right move for you? Speak to the Algarve Home Sales team for local expert advice on finding your place in the sun.