Porto has become one of the prime investment locations in Portugal
Porto has become one of the prime investment locations in Portugal

Buying property in Porto. Your 2024 guide

Explore our guide for all the info you need to buy property in Porto, tailored to anyone facing challenges and destination decisions.

Delia Mihuț
Written by: Delia Mihuț
Published at 2024-06-17
Last updated on 2024-07-24
Readtime 5 minutes

While Lisbon often tops property buyers' lists, Porto is fast gaining traction as a prime real estate investment spot in Portugal. 

Why’s that?

  • more affordable property prices compared to Lisbon
  • excellent infrastructure, including transportation and healthcare
  • steady influx of tourists and students, contributing to high demand for rental properties

Read on to gain insights into the current market, best neighborhoods, and mortgage options to optimize your budget when buying property in Porto. 

What’s the property market in Porto like?

As of 2024, the average cost of a property in Porto is around €4,300 per square meter

This price point reflects Porto's ability to balance affordability and high quality of life, making it a more cost-effective option than other major European cities. 

For example, a spacious two-bedroom apartment in Porto's city center costs approximately €300,000, whereas a similar property in central Paris or London could easily exceed €1 million.

'Porto's real estate market continues to thrive, driven by domestic and international demand. The city's unique blend of culture, history, and modern amenities makes it highly attractive to investors.’ says Ricardo Guimarães, Director of Confidencial Imobiliário.

Best neighborhoods to buy property in Porto

While Porto does not have an official count of neighborhoods, as administrative divisions can vary, the city is typically divided into several districts and neighborhoods, totaling around 15 to 20 distinct areas.

Here are three of the best neighborhoods to consider: 

Ribeira: breathtaking views

Average price per m2:  €3,300

As a UNESCO World Heritage site, Ribeira's picturesque streets and lively atmosphere make it a standout neighborhood in Porto. 

The properties are primarily renovated apartments nestled in historic buildings.

Foz do Douro: beachfront living and luxury properties

Average price per m2: €4,300

This neighborhood, where the Douro River meets the Atlantic Ocean, is famed for its stunning sunsets. 

In Foz do Douro, you can find modern apartments and upscale villas.

Bonfim: more affordable housing options

Average price per m2: €3,200

Bonfim is known for its dynamic community, with new apartments and traditional homes.

The neighborhood has become a favorite among young professionals and artists. 

Is it better to access a mortgage when buying a property in Portugal?

Accessing a mortgage can optimize your investment, allowing you to use your capital more effectively. 

Mortgages make property acquisition more feasible, allowing you to spread the cost over a more extended period, reducing the immediate financial burden.

Is it easy to access a mortgage to buy property in Porto?

Non-residents can secure a mortgage in Portugal, though they face slightly stricter requirements, and often need a higher down payment.

They must also provide additional documentation, such as proof of overseas income and international credit reports. 

“Banks roll out new offers each week. What's best for one client might not suit another. It all comes down to each person's financial situation and needs,” says Reorganiza, Portugal's leading mortgage broker.

Mortgage options

Novo BancoBankinter, or CGD are among the top Portuguese banks offering non-resident mortgages.

Each bank may have varying terms and conditions, so comparing offers is key to finding the best fit for your financial situation.

A solid credit history, sufficient income to cover mortgage payments, and a substantial deposit can strengthen your application.

Eligibility criteria

Demonstrating financial stability and reliability as a borrower enhances your chances of approval for a mortgage in Portugal. 

The maximum debt-to-income level is typically 35%, and the loan-to-value (LTV) ratio ranges from 75% to 80%. A deposit of 20% to 50% is usually required.

Documentation required

You need to provide payslips, bank statements, tax returns, and the Portuguese NIF (Número de Identificação Fiscal), including proof of income from your home country and verification of legal status in Portugal. 

How Homevest can help you secure the best deal for your property in Porto

Having someone guide you through the mortgage process in a foreign country can save you a lot of time. The right support can make a significant difference in your experience.

Homevest is a digital platform that helps non-residents access the best mortgage deals in Portugal directly from abroad.

Using Homevest, customers can consolidate their credit files and upload all necessary documents in one place, allowing them to request and compare bank offers more efficiently. 

Brokers and banks come together to speed up obtaining a cross-border mortgage in Portugal. Besides full transparency throughout the process, customers have assistance in comparing offers from top Portuguese banks. 

Pros and cons of buying a property in Portugal as a foreigner

If you need help deciding on the best destination in Portugal to buy a property or are still wondering if it's a good decision, weighing the pros and cons might help.

Pros

  • Portugal offers a good quality of life with a pleasant climate, rich culture, and a high level of safety
  • lower cost of living compared to other Western European countries
  • the Non-Habitual Resident (NHR) status provides significant tax incentives, including a flat 20% income tax rate for certain Portuguese-sourced incomes and tax exemptions on foreign-sourced pensions, dividends, royalties, and interest for the first 10 years of residence
  • great opportunity for renting the property due to the steady influx of tourists

Cons

  • buying property in Portugal can be a complex and time-consuming process, including obtaining a fiscal number and dealing with various local municipal offices
  • property values in Portugal can change due to economic conditions, tourism trends, and regional developments, especially in Lisbon, Porto, and the Algarve
  • non-residents face higher income tax rates, at a flat rate of 25% compared to a minimum of 14% for residents, which could be a consideration when planning finances in Portugal

Frequently asked questions

1. Is Porto property a good investment?

Porto offers solid investment potential thanks to its growing tourism and comparative affordability. According to Goldcrest Portugal Real Estate:

“Rental yields in Porto stood at 5.6% in 2023, more than in Lisbon (5.2%). As an affordable city with excellent infrastructure, Porto has become one of the prime investment locations in Portugal. Given the steady influx of tourists and students, you’ll be able to rent out your property for much of the year.”

2. What is the best option: buying property in Porto or Lisbon?

Each city presents distinct advantages depending on your lifestyle preferences and investment goals. Be sure to weigh factors such as property prices, cultural ambiance, and market dynamics before deciding. Despite getting more pricey, Lisbon is more affordable compared to many other Western European capitals.

3. Can I get a Golden Visa if I buy a property in Portugal?

Portugal’s Golden Visa underwent big changes in 2024. It no longer accepts the purchase of property as a qualifying criteria. You now have to invest in other ways to qualify.

 

Buying property in Porto offers an attractive opportunity amidst its rising real estate market. 

With average prices reflecting a favorable balance of affordability and quality of life, Porto stands out as a promising investment destination in Europe.

Homevest is here to help you navigate the process and secure the best mortgage deals, ensuring your investment journey is smooth and successful. 

 

Sources used in the article: 

  1. Portugal Buyers Agent
  2. Cushman & Wakefield
  3. With Portugal
  4. Ministry of the Economy’s Office of Strategy and Studies (GEE)
  5. Portugal Buyers Agent
  6. Porto House Market Report
  7. Immigrant Invest 
  8. Global Citizen Solution
 

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.

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