Is buying a property in Chiado a good investment?

Last updated on December 29, 2023

Yes, the analysis of Lisbon's property market is included in our pack

If you've seen the historic charm and cultural attractions in Chiado, you may have thought about investing in property in this Lisbon district.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Portugal, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Chiado?

Chiado in Lisbon stands out as a prime real estate location and there are several factors that contribute to its attractiveness.

First, let's delve into what makes Chiado unique in the realm of property markets, especially when compared to other areas in Lisbon.

One of the key attributes of Chiado is its rich cultural heritage. This neighborhood is steeped in history and artistic significance, making it a hub for those who appreciate a blend of traditional and contemporary lifestyles.

Unlike some of the more modernized areas in Lisbon, Chiado retains its historic charm, characterized by classic Portuguese architecture, quaint streets, and iconic landmarks. This aspect alone sets it apart from other real estate markets that might focus more on modern development.

Now, if you're wondering about its popularity, it's interesting to note that Chiado's rise as a sought-after location isn't a recent phenomenon.

It has been gradually gaining traction over the years, especially since the late 20th century, following significant restoration and rejuvenation efforts after the devastating fire of 1988. These efforts not only restored the area but also infused new life, attracting investors and property buyers.

The hype around Chiado, bolstered by its historical and cultural appeal, seems poised to remain. This is backed by consistent interest from a diverse range of buyers, including international investors and cultural enthusiasts.

The area's enduring appeal is not just about its past; it's also about how well it has integrated modern amenities and lifestyle elements, making it a comfortable yet vibrant place to live.

Speaking of who it attracts, Chiado is particularly appealing to a certain demographic. It tends to draw in those who appreciate arts and culture, as well as professionals and expatriates who are looking for a blend of Lisbon's historical charm and modern conveniences.

The neighborhood is also attractive to those who value a central location with easy access to other parts of the city, as well as proximity to high-end shops, restaurants, and cultural venues.

However, like any real estate market, Chiado has its drawbacks. One of the primary concerns is the cost.

The area's popularity and historical significance have driven up property prices, making it one of the more expensive neighborhoods in Lisbon. This could be a deterrent for some buyers, especially those with a tighter budget.

Additionally, the bustling nature of the area, while attractive to many, might not appeal to those seeking a quieter, more residential setting.

Also, given its historic nature, some buildings in Chiado may require more maintenance or may not offer the same level of modern amenities as newer developments.

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Why is Chiado a nice place to live?

Chiado offers a unique and appealing lifestyle making it a desirable place to live for many, let's explore various aspects of living in this vibrant neighborhood.

The lifestyle and culture in Chiado are rich and diverse. Known for its historical significance, the area is a melting pot of traditional Portuguese culture and modern urban living.

You'll find a lively arts scene here, with numerous theaters like the Teatro da Trindade and galleries showcasing both classic and contemporary works.

The streets are often bustling with activity, offering a blend of cozy cafes, and renowned restaurants. Chiado's cultural vibrancy is one of its most charming attributes, attracting those who appreciate a lively urban atmosphere combined with historical charm.

The expat community in Chiado is thriving, thanks in part to the area's cosmopolitan nature. Many expatriates are drawn to the neighborhood's cultural richness and its blend of traditional and modern amenities. The community is generally welcoming, and newcomers often find it easy to integrate and make connections.

However, living in Chiado does come with a higher cost. The area is one of the more upscale neighborhoods in Lisbon, and this is reflected in the real estate prices and cost of living.

Renting or buying property here can be quite expensive compared to other parts of the city. Day-to-day expenses, like dining out and shopping, also tend to be higher, given the number of high-end establishments in the area.

Safety in Chiado is generally good, with the area being well-patrolled and considered safe for both residents and tourists. Like any busy urban area, it's always wise to be aware of your surroundings, but overall, Chiado is known to be a secure place to live.

In terms of amenities and facilities, Chiado is well-equipped. While there are no large hospitals directly in Chiado, the Hospital de São José and the Santa Marta Hospital are located nearby, providing excellent medical care.

For families, there are educational institutions like the Colégio São João de Brito and the Redbridge School in the vicinity, offering high-quality education. Shopping enthusiasts will enjoy the Armazéns do Chiado, a popular shopping center housing various retail outlets.

The quality of infrastructure in Chiado is commendable. The roads are well-maintained, and the neighborhood boasts reliable utilities and excellent internet connectivity, catering well to both residential and business needs.

Accessibility is one of Chiado's strong points. It is well-connected to other parts of Lisbon, making it easy to commute or explore the city. The Baixa-Chiado metro station is a central hub, providing efficient access to various parts of Lisbon.

Additionally, the neighborhood is served by a network of buses and the iconic trams, notably Tram 28, which is not only a tourist attraction but also a practical means of transportation.

Lastly, Chiado's proximity to major transport hubs is a significant advantage. It's relatively close to Lisbon's main airport, Humberto Delgado Airport, which is easily accessible via public transportation or a short taxi ride. This connectivity makes Chiado an ideal location for those who travel frequently or have visitors from abroad.

How much does it cost to buy real estate in Chiado?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Portugal.

Buying property in Chiado presents an interesting landscape for potential investors and homebuyers.

The types of residential properties available in Chiado vary, mainly comprising apartments, including both modern and traditional styles. You'll find beautifully renovated old buildings that offer a blend of historical charm with modern amenities.

Houses and luxury villas are less common in this urban setting, but they do exist, especially in areas adjacent to Chiado.

In Chiado, apartments, particularly those that blend historical features with contemporary living, are in high demand. This demand stems from the neighborhood's unique appeal it's a culturally rich and historically significant area, offering a lifestyle coveted by many.

The combination of modern conveniences and historical charm makes these properties particularly attractive.

The real estate market in Chiado is predominantly composed of resale properties. The nature of the neighborhood, with its historic buildings and protected architectural heritage, means that there are limited opportunities for new developments. This scarcity of new builds adds to the charm and value of existing properties.

When it comes to pricing, properties in Chiado are among the most expensive in Lisbon. The price per square meter can vary significantly depending on the property's size, condition, and exact location.

Generally, you can expect prices to start from around €6,000 per square meter, going up to €10,000 or more for premium properties with exceptional features or locations. These figures are indicative and can fluctuate based on market conditions.

Over recent years, property values in Chiado have seen a steady increase. The neighborhood's enduring appeal, combined with Lisbon's growing popularity as a tourist and expatriate destination, has contributed to this upward trend. The limited availability of properties in this area also plays a role in driving up prices.

Looking at potential future developments, the real estate market in Chiado is expected to remain robust. The neighborhood's appeal is unlikely to wane, given its cultural and historical significance.

However, any upcoming city planning changes or new developments could impact property values. For instance, if there are plans to enhance infrastructure or improve public amenities, this could make the area even more desirable.

Predicting the future of the real estate market in Chiado suggests a continued potential for value increase. The factors underpinning this include the limited availability of properties, the area's unchanging appeal to a certain demographic, and Lisbon's overall growth as a desirable city for both living and investment.

Where is the best area to buy a property in Chiado?

When considering the best area to buy property in Chiado it's important to understand the nuances of this charming and diverse neighborhood.

Chiado is known for its vibrant cultural scene and historic architecture, but within the area, the atmosphere and property types can vary. Near the Largo do Chiado and the streets around the São Carlos National Theatre, the vibe is distinctly cosmopolitan.

This area is bustling with cafes, shops, and cultural hotspots, making it ideal for those seeking an energetic urban lifestyle. Properties here are predominantly apartments, often in beautifully restored historical buildings. These properties command a premium due to their location and architectural appeal.

In contrast, the areas closer to the Santa Justa Lift and Carmo Convent offer a slightly more relaxed atmosphere. These parts of Chiado still provide the charm and convenience of the neighborhood but are a bit quieter, appealing to those who prefer a less busy environment.

Regarding prices, the closer you are to key landmarks like the Chiado Square or the Santa Justa Lift, the higher the property prices tend to be. These areas are highly sought after, reflecting in their premium pricing.

As for up-and-coming areas within Chiado, the streets leading towards the Bairro Alto border are gaining attention. This area offers a blend of Chiado's charm with the bohemian flair of Bairro Alto.

It's becoming popular among buyers who want to be close to the action but prefer a slightly more artistic and edgy environment. The properties here can be a good investment as the area continues to develop and gain popularity.

When looking for a property in Chiado, areas around Rua Garrett and Rua do Carmo are highly recommended. These streets are quintessentially Chiado, offering a classic Lisbon experience with their elegant shops, historic cafes like A Brasileira, and proximity to cultural venues.

These areas embody the essence of Chiado and are ideal for those who want to immerse themselves in its unique blend of tradition and modernity.

On the contrary, areas immediately adjacent to the busiest tourist spots might be less advisable for those seeking a more peaceful residential experience. While living near popular landmarks has its appeal, it can also mean dealing with the hustle and bustle of tourist traffic, especially during peak seasons.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Portugal.

Area Name	Atmosphere	Property Types	Price Range
Near Largo do Chiado	Cosmopolitan, Energetic	Apartments in historical buildings	High
Near Santa Justa Lift and Carmo Convent	Relaxed, Quieter	Mix of old and new apartments	Medium to High
Bairro Alto border	Artistic, Edgy	Variety of properties	Rising
Rua Garrett and Rua do Carmo	Classic Lisbon, Cultural	Elegant apartments	Very High
Adjacent to busy tourist spots	Very Busy, Touristy	Varied, mostly apartments	Varies, often High

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Is there a strong rental demand in Chiado?

In Chiado there is indeed a strong demand for rental properties and understanding the nuances of this market can be beneficial for potential investors or property owners.

The rental demand in Chiado leans more towards short-term rentals, though there is also a significant market for long-term leases. This trend is largely driven by Chiado's popularity as a tourist destination and its appeal as a cultural and historical center in Lisbon.

Tourists and visitors often prefer short-term rentals, seeking accommodations that provide a more authentic and local experience compared to hotels.

The target demographic for rentals in Chiado is quite diverse. For short-term rentals, the typical tenants are tourists, both domestic and international, seeking to experience the heart of Lisbon. These visitors often look for properties that offer a blend of traditional charm and modern amenities.

Long-term renters in Chiado are usually professionals, expatriates, or students who are attracted to the area's vibrant cultural scene and central location. They tend to look for comfortable and well-equipped apartments that are suitable for longer stays.

The profiles of potential tenants are quite specific. Tourists typically seek out well-furnished and aesthetically pleasing apartments, preferably with a local, authentic feel. They value properties that are close to major attractions, restaurants, and cultural sites.

For long-term tenants, the preferences include modern facilities, good internet connectivity, and proximity to public transport and essential services like supermarkets and healthcare facilities.

Specific areas within Chiado that are especially popular for rentals include the vicinity of Largo do Chiado, Rua Garrett, and near the Santa Justa Lift. These locations are highly sought after due to their central location and easy access to Chiado's myriad attractions.

Amenities that can help reduce vacancy rates and attract tenants include high-speed internet, modern appliances, air conditioning, and if possible, unique features like balconies or terraces with views. Properties that offer these amenities are more likely to be in demand, as they cater to the needs and expectations of both short-term and long-term renters.

Regarding the potential returns on investment for properties in Chiado, they can be quite attractive, particularly for short-term rentals.

While specific numbers vary, properties in prime locations can yield significant rental income, especially during peak tourist seasons. Long-term rentals might offer lower returns in comparison, but they provide a more stable and consistent income stream.

In terms of property types, apartments with unique features, such as those in historic buildings with modern renovations, are increasingly in demand.

These properties not only attract short-term renters looking for an authentic Lisbon experience but also appeal to long-term renters who appreciate the blend of historic charm and modern comfort. Such properties are likely to offer better yields due to their unique appeal and the high demand in the rental market.

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Is it easy to buy a property as foreigner in Chiado?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Portugal.

Buying property as a foreigner in Chiado is relatively straightforward, although there are certain considerations and steps that need to be taken into account.

Firstly, there are no specific regulations or restrictions for foreign buyers in Portugal, which includes Chiado in Lisbon. This openness makes it an attractive market for international investors and homebuyers.

However, despite the lack of restrictions, navigating the purchasing process can still be challenging due to language barriers, legal procedures, and the local real estate market's intricacies.

The purchasing process in Chiado typically involves several key steps; finding a property, agreeing on a price, obtaining a Fiscal Number (Número de Identificação Fiscal or NIF), signing a promissory contract (Contrato de Promessa de Compra e Venda), paying a deposit, and finally, completing the transaction with the deed (Escritura) and registration. This process is standard across Portugal.

Regarding the risks associated with property investment in Chiado, one primary consideration is the market volatility. Like any real estate market, prices in Chiado can fluctuate due to various factors like economic conditions, tourism trends, and local developments.

Additionally, investing in older properties might involve unforeseen maintenance or renovation costs, which can be higher in historic areas like Chiado.

There are classic pitfalls or common mistakes that people, especially foreigners, might face when buying property in Chiado. One of these is underestimating the importance of legal due diligence. It's crucial to verify property titles, ensure no outstanding debts or legal issues with the property, and understand the local property laws.

Another common mistake is not being fully aware of the tax implications, both in terms of purchase taxes and ongoing property taxes.

Working with a local real estate agent or lawyer is highly recommended, especially for foreigners. A local expert can provide valuable insights into the Chiado market, assist with language barriers, and ensure that all legal aspects of the purchase are correctly handled.

They can also help navigate local customs and practices unique to Portugal, such as the use of a 'Contrato de Promessa' (promissory contract) which is a critical part of the property buying process in Portugal.

Common exit strategies for property investors in Chiado include selling the property for capital gains or renting it out for rental income. The choice of strategy should depend on the market conditions, the investor's personal circumstances, and their investment goals. Chiado, with its high demand for both long-term and short-term rentals, can offer attractive rental yields.

However, it's important to stay informed about market trends and potential changes in local laws that might affect the profitability of these strategies.