The Portuguese government has now issued over 700 golden visas since the scheme began in 2012 and numbers are accelerating. The deputy Prime Minister Paulo Porta is projecting over €500 million in investment in 2014 through the residency programme so we expect that will typically be up to 1000 golden visas in the next year. Portugal is not a huge country, just 10 million population, and property above €500,000 is very much at the higher end in a country where average prices are a lot lower. Hence 1000 people chasing a limited supply of properties over €500,000 in the coming year can only have one effect on the market and that is to push up prices.
We are already seeing this effect in Lisbon in particular where developers are giving minimal discounts due to the number of international investors now chasing new properties for the Portugal golden visa. It looks like a very good time to buy as prices are around 22.5% below their peak reached in 2007 and prices appear to have stabilised. The first three quarters of 2013 show flat prices after 6 years of decline and economic growth has returned to Portugal in the last half of 2013 with GDP rising 1.7% pa in the last quarter of 2014. We await data on house prices for Q4 2013 and Q1 2014 but expect these to be positive for the property market.