High demand for Portugal’s sustainable homes
DUBAI, UAE, Oct. 22, 2022 /PRNewswire/ — The US dollar and the Euro are finally neck-to-neck, for the first time in 20 years.
The weakened Euro offers great investment opportunities in Europe. June alone recorded the highest figures with over 78 million Euros worth of investments in the Portugal Golden Visa program, a first since 2020.
As the popular nation draws more investors, all of Portugal is booming and in this blog we go over what makes it one of the most progressive real estate destinations in the world.
Top eco-friendly destination
In the 12th century, Portugal set one of the oldest environmental legislations in the world to protect its Cork forests, the country’s rich heritage. In the 21st century, it prioritised sustainability through housing, recycling, and renewable energy, making it a leader in environmentalism in the European Union and the number 1 Eco-Travel destination of 2019, according to the editors of “Blue & Green Tomorrow.”
Conscious citizens with a passion for recycling and awareness of climate change demonstrate Portugal’s dedication to sustainable living. A survey by the European Investment Bank that explored people’s perceptions of climate change in 2021 showed that 91% of Portuguese people are willing to use low-polluting trains as a substitute for short-distance flights. While there is pressure from the government to reduce the carbon footprint, more than 80% of the Portuguese population agrees with the government’s stricter policies for energy-efficient properties, a percentage higher than the European Union average.
The future of real estate emphasizes sustainability, as an increasing number of investors are hunting for sustainable properties. Based on statistics from the “World Green Building Council,” approximately 40% of the global carbon emissions are caused by buildings: construction materials and electric consumption. In its commitment to sustainability, Portugal has implemented measures to encourage environmentally-friendly property developments. The country’s real estate companies and construction industry are shifting to a more environment-friendly approach. The viewpoint of landlords in Portugal is further repositioning towards a higher rental yield for green properties when compared to non-green properties. UK’s Green Journal states that 83% of investors in Portugal foresee a rise in demand from tenants for sustainable properties.
Creating properties that are characterised as long-lasting and have a minimal negative impact on the environment will be a recognisable advantage in the future. Throughout its life cycle, a sustainable building will protect the environment, improve human well-being, and preserve valuable resources. From design and construction to renovation and demolition, a sustainable building will remain environmentally responsible all through generations.
To a wide range of property developers, achieving ‘net-zero‘ is of increasing importance. Net-zero is a term that refers to zero-energy buildings: buildings that consume as much energy as can be produced via renewable resources on site. Perhaps ambitious but achievable in various regions like Portugal. With an increasing focus on environmental issues, property developers are focusing on renewable energy to substitute fossil fuels, which aligns with current legislation in Portugal. Numerous companies in Portugal have put sustainable buildings at the core of their business.
Sustainable buildings are not only growing in popularity among developers but also among investors. As impact investment is booming, investors are now looking to make a difference while making a profit. In a way to contribute to worthwhile causes, many investors choose to go for businesses that produce social or environmental benefits. Investing in sustainable property developments provides both a significant financial Return on Investment (ROI) and a social return on investment (SROI).
Rise in numbers
In Portugal, the eco-friendly real estate sector is gaining more interest due to its sustainable economic growth. Since 2016, real estate in Lisbon has been growing at a rate of 2.5% annually, while locations like Santa Maria da Feira experienced an unparalleled annual growth of 12%. Better quality construction, self-sustained buildings, and energy-efficient designs are becoming the new standard in Portugal. Since greener materials and construction methods are nowadays more available and less costly, the development of sustainable properties is more viable. When investment in Portuguese real estate reached EUR 26 billion in 2019, the majority recognised the sector as the chief growth driver post-COVID-19.
In Lisbon and Porto, the demand for properties has grown by 20%. Aside from major Portuguese cities, there is an increase in demand for real estate in smaller cities. At a close distance of around an hour from Lisbon, Sintra attracted more real estate investors in 2021 than in previous years, noted the National Research Institute. The rental housing market of all real estate in Portugal has increased by 16% in the last ten years.
Portugal’s latest visa scheme
Portugal’s Golden Visa Scheme led the Portuguese property market to boom in the past decade. The scheme was a catalyst in restoring old properties as foreign investments contributed to the transformation into eco-friendly properties. Recently, Portugal introduced the Green Visa scheme, where a minimum investment of EUR 500,000 in environmental projects such as eco-tourism and organic farming will grant the investor the powerful Portuguese passport and assist in the transition to a carbon-free economy.
Generally, a country’s stable economic growth and continued interest in sustainable properties result in a successful investment. Portugal’s particular Green Growth agenda is placing the country at the national lead. The enthusiasm of the Portuguese government and people to establish a sustainable living and a carbon-neutral country makes Portugal an attractive destination for investment in eco-friendly property.
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