In Lisbon, the sky is the limit! First the capital city of Portugal leads with the highest rent increase in the first half of year 2023, outdoing Singapore and Berlin, second, the city is promised to be 'the next Global Tech Hub'. Nothing less. Dive into its fiercely blue sky.
São Bento, Lisbon, in the sunset. Courtesy dandyvagabonds.com
Let’s look closely at the dizzying rise in Lisbon rents since 2023; it surprised local and foreign residents alike. International expert consultancies and media lean over the cradle, sharing datasets and analysis on the matter.
‘A Rising Star’ was indeed the title of a 2022 Savills report. A year later, the international consultancy analyzes rent increase among a sample of 30 cities, in premium properties. In the first half of this year, the value of rents in Lisbon rose 13.9%. In June alone, the increase amounted to 32.7%.
"Magnificently situated on a series of hills that descend into the great river Tagus, Lisbon is one of the most beautiful cities in the world. walking through its colourful and picturesque streets, you will constantly come across the most beautiful and surprising sights, especially from the viewpoints and esplanades strategically located at the top of each hill.”
Savills brochure 2022
Lisbon's value surpassed rent increase registered in cities such as Singapore (13.6%) – the second highest – and Berlin (9.2%), with the third largest increase. It is also more than double the increase registered in cities like Dubai – 5.4% between January and June of this year – or in Kuala Lumpur, which saw a rise of 4.3%.
Among the ten European cities analyzed in the study, after Lisbon and Berlin, Amsterdam comes in eighth position, wherein the first half of this year rents rose by 3.3%, followed by Barcelona with an increase of 3% and Milan and Madrid with 2.9%. In London and Rome, the half-year increase was 1.9% and in Athens, 1.8%. Paris was where the rise was less pronounced with 0.2%. Source TPN/Savills
How to explain such a spike?
First, we should acknowledge the word of mouth that spread interest for Portugal and its capital city from Europe to the UK, Brazil to California, with Ukrainians and Russians joining after the war, and now pretty much on everyone’s lips. We also count some disappointments, particularly among digital nomads who would have loved to keep the secret, and more importantly, strikes by locals feeling excluded from their own city.
Savills justifies it as a result of the high international demand for premium properties. The study underlines that the Lisbon and Singapore rental markets “have seen significant levels of price growth over the last 18 months, with rents rising by more than 40%” as “there was greater demand for international tenants that drove the premium housing market”.
But the Financial Times points to another direction. The newspaper states that this is the result of “imminent rent control policies, which led some landlords to preventively increase rents”. At issue is the 2% limit on updating the value of rents, instead of reflecting the value of inflation, in force since January of this year. That is if the Mais Habitação program [More Housing], goes through.
Goodbye Golden Visas!
The program would also officially terminate the country’s Golden Visa route by property investment. According to data from the Portuguese Immigration and Border Service (SEF) a total of 861 golden visas were granted in the first half of 2023, 475 in the second quarter of that period. During the same period €7,157,485,864.42 in accumulated terms were invested in Portugal through this program.
But keep your #goldrendreams alive, there are many more sweet places to invest in Portugal. We must think of future prospects with advanced thinking. With heatwaves hitting the south of Portugal, is it still the Eldorado it once was? It might instead be the Serra da Estrela or as we recommend it, regions like Viana do Castelo in the Northwest of the country. There is a bet that with the number of sleek and innovative eco projects blossoming across various regions, Lisbon might become an outpost for supplies, for many. And to go down to the Algarve, there is now a direct Flixbus from Lisbon Airport to Faro Airport.
Hick on the Rota da Garganta de Loriga in the mountain of Serra da Estrela.
São Bernadino Beach, Peniche Peninsula. Courtesy dandyvagabonds.com
So, let’s look at the bigger picture.
If Lisbon leads the trends, the Financial Times states that "rents in European cities such as London, Paris and Berlin are at their highest level on record; renters are feeling the squeeze from the Greek islands to Tallinn.” This isn’t an isolated case. Rent increase is madness in London where the prices have gone to the roofs with no wage increase in a decade.
“I can’t justify paying over £1,000 / €1,165 [a month] for a room, especially if it’s not [going] towards a mortgage,” says Emily, a 29-year-old visual artist. “You’re just paying to exist and not even paying to fully be able to enjoy what the city has to offer because you’re just trying to keep a roof over your head.” In that same article, Emily is quoted to sleep on her sister’s sofa each week from Monday to Thursday and on weekends, in a room that is rented to someone else during the week.
Mortgage increases in Europe. Courtesy of the Financial Times.
Small towns have tones of charm and tight-knit communities. And artists are moving to inland Portugal for space, the way many artists moved from New York to New Mexico and Texas in other times. Courtesy dandyvagabonds.com
And let's think outside the box!
Aren’t capital cities becoming more and more transient spaces and flagships magnets for tourists? Apart from the local and foreign residents who were smart enough to buy when Lisbon was close to bankruptcy around 2012 and 2015, and until 2021, for anyone buying now to live in the city, the hunt is just a bit tougher and prices less soft. Meanwhile, even our friends in Lisbon, Portuguese and others, are on the move, renting out their properties for short-term rentals, moving to smaller cities and the peaceful countryside, or enjoying their incomes to travel abroad.
Cafe Janis in Lisbon, at a stroll from TimeOutMarket. #cafejanis #timeoutmarket
Look around Portugal with an innovator mindset.
The 21st century is about movement and shifting lifestyle strategies. Every corner of the country around 2 hours from Lisbon or Porto, is a valid choice and soon will be an overheated marketplace.
There is no doubt, Lisbon will remain the glam theater it has become, with wonderful hospitality offers, sharp cultural events, fun nights with friends, and rare goods. No difference for the elegant city of Porto. That’s why people will go in and out these cities, by bus or car, and feel the queens & kings of all universes!
Also let’s not pretend, there is still time to buy and live in Lisbon full time. The most affordable neighbourhoods for a two-bedroom apartment are Beato, Lumiar, Marvila, Santa Clara, Carnide, São Domingos de Benfica and Olivais. The most expensive: Santo António, Misericórdia, Santa Maria Maior, Avenidas Novas, Estrela and Campo de Ourique, expand your mind.
Williamsburg [Brooklyn], Hackney [London East End] or Canal Saint-Martin [Paris 10e] have all emerged as the coolest places to be when Manhattan, Central London and Le Marais, Paris, became madly expensive. Yep.
An overview of the elegant city of Porto. Courtesy dandyvagabonds.com
Thinking even bigger? Call in the joker card, aka the Californian mindset.
We keep comparing Portugal to the state of California, Comporta-Melides to The Hamptons, Seixal to Brooklyn, and so on… But what about a bright new pilot city? Check this out as food for thoughts.
In the Silicon Valley where the tech elite has grown tired of housing shortages and developer restrictions, a coalition of investor-billionaires came together to buy thousands of acres of San Francisco Bay Area land. The story broke in the New York Times, unveiling what was until now a mysterious buyer for a few years in the Solano County.
Behind the curtain, the persona grata A-List of tech investors, among whom the highest-ranked business angels. Sheltered under the company name Flannery Associates, the coalition has already bought large plots of lands in a predominantly agricultural region 60 miles northeast of San Francisco. Investors include "Mr. Moritz; Reid Hoffman, the LinkedIn co-founder, venture capitalist and Democratic donor; Marc Andreessen and Chris Dixon, investors at the Andreessen Horowitz venture capital firm; Patrick and John Collison, the sibling co-founders of the payments company Stripe; Laurene Powell Jobs, founder of the Emerson Collective; and Nat Friedman and Daniel Gross, entrepreneurs turned investors. Andreessen Horowitz is also a backer."
Ranch land and turbines in the Montezuma Hills area of Solano County, Calif., where a company called Flannery Associates has been buying large amounts of land.Courtesy of Jim Wilson/The New York Times> Read the full story.
According to the Times, “the company, which has little information public about its operations, has committed more than $800 million to secure thousands of acres of farmland, court documents show. One parcel after another, Flannery made offers to every landowner for miles, paying several times the market rate, whether the land had been listed for sale or not.”
The Silicon Valley mindset has always been about big ideas to change the world: “The practical need for more space has at times morphed into lofty visions of building entire cities from scratch. Several years ago, Y Combinator, the start-up incubator, announced an initiative with dreams of turning empty land into a new economy and society.”
What Now? Where to place the cursor?
A higher number of Americans are chasing the Californian dream elsewhere now that the dream has turned sour with wildfires, gun violence, outraging housing prices, white supremacist politics looming in the background, and, for tech giants, a shortage of tech visas. Are Americans moving to Portugal and other parts of Europe with the capitalistic model, often associated with greed and resource extraction, in their pockets? Or on the contrary, will they try out the Portuguese etiquette of a simple life with less needs and more bond to nature, that wasn’t just so due to their limitation of means?
We believe new conquests can come along with new thinking paired with ethical manners. In movement, elegance in manners is the response to generous welcoming. One day we might measure countries’ worth based on their net hospitality value [NHV] rather than just their gross domestic product [GDP]. That would surely reverse the ranks and remind us, visitors, residents and citizens of how precious it is to share living on planet Earth, be it in welcoming Portugal or anywhere else.
Sunset facing the Atlantic Ocean along the Silver Coast of Portugal.
The night reflecting in puddles of LX Factory, Lisbon. #lxfactory
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