Lately, there have been more and more posts on the forums discussing the cost of living. It seems everyone is quite mindful of their spending, especially when it comes to a major expense like property. I’ve been thinking about this myself and took a look at the situation in neighboring Portugal. I found that although the two countries are right next to each other, their current property markets are like a tale of ice and fire. I wanted to share some thoughts on this, just based on my personal observations.
Portugal: Golden Visa Ends, Are Property Prices Cooling Down?
In recent years, Portugal’s ‘Golden Visa’ program has driven property prices sky-high, especially in Lisbon and Porto, making them seemingly unaffordable for many locals. At the end of last year, Portugal officially closed the property investment pathway for the Golden Visa, a move that sent significant shockwaves through the market. My real estate agent friends have told me that since then, many international buyers who were solely interested in obtaining residency have withdrawn, and inquiries for high-end apartments have dropped significantly.
However, it’s unrealistic to expect prices to drop drastically overnight. After all, underlying demand in places like Lisbon still exists, and with rising construction costs and inflation, prices are holding firm. The main change is that the frenetic pace of appreciation has likely been curbed. It now feels more like a cooling-off period. For those genuinely looking to settle in Portugal, this might be a good time to browse at a more relaxed pace, without the same pressure as before when considering [Iberian property].
Spain: Steady Growth, Led by Madrid and Barcelona
Turning our attention to Spain, the situation is quite different. Although we also have a ‘Golden Visa,’ its impact on the market hasn’t been as dramatic as in Portugal. The Spanish market feels healthier and more stable. Property prices in major cities like Madrid and Barcelona are consistently rising, especially in well-located central areas, which are always in high demand. Coastal cities like Valencia and Málaga are also attracting large numbers of retirees from Northern Europe and digital nomads, thanks to their high quality of life and excellent climate, leading to substantial price growth there as well.
I’ve put together a simple data comparison for a clearer picture:
| City | Average Price Q1 2024 | Market Trend |
|---|
| Lisbon | 5000 - 6500 | Growth slowing, stabilizing |
| Madrid | 4500 - 6000 | Steady increase |
| Barcelona | 4200 - 5500 | Steady increase |
| Valencia | 2200 - 3000 | Rapid increase |
My feeling is that if you’re a pure investor looking for short-term high returns, now might not be the best time, especially in Portugal. But if you’re buying Spanish and Portuguese property to live in, it’s still a good idea to act when you find the right place in Spain’s major cities. After all, the European Central Bank’s cycle of interest rate hikes appears to be ending, and if rates are lowered in the future, mortgage pressure could ease. What are your thoughts? I’d love to hear them in the comments!
