Is buying a property in Graça 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 enjoyed the charming atmosphere and historic streets in Graça, you may contemplate living in this Lisbon neighborhood.

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 Graça?

Graça, a charming and historic neighborhood in Lisbon, has become a magnet for property buyers, and it's not hard to see why.

Nestled on one of the city's highest hills, it offers a unique blend of traditional charm and modern conveniences, setting it apart from other real estate markets in Lisbon and beyond.

One of the standout attributes of Graça is its breathtaking views. Being perched atop a hill, many properties here boast panoramic vistas of Lisbon, including the iconic Tagus River. This scenic advantage is something that not all areas in Lisbon can offer.

Plus, the area is known for its historical and cultural richness. It's home to several historic landmarks, such as the São Vicente de Fora Monastery and the Santa Engrácia Church , which infuse the neighborhood with a sense of history and grandeur.

Graça's rise in popularity among property buyers began to surge in the early 2000s. This was partly due to Lisbon's overall growth as a tourist destination and its recognition as a hub for culture and art. Graça, with its picturesque streets and historical significance, naturally drew attention.

The question of whether this hype will remain is supported by the continuous interest in Lisbon's real estate, especially among international buyers. The city's ongoing efforts to revitalize neighborhoods and improve infrastructure suggest that areas like Graça will continue to be sought after.

The type of people attracted to Graça is diverse, reflecting the neighborhood's blend of old-world charm and contemporary living. It appeals to a range of buyers, from young professionals drawn to the vibrant cultural scene to retirees looking for a tranquil yet connected place to live.

Moreover, investors are attracted to Graça due to its potential for rental returns, given the area's popularity with tourists.

However, every coin has two sides, and Graça is no exception. Some of the weaknesses of this area stem from its historical nature. The very charm of the old buildings can sometimes translate into a need for renovation and maintenance, which might deter some buyers.

Additionally, the neighborhood's popularity can lead to crowded streets, especially during peak tourist seasons. This could be a downside for those seeking a quieter, more secluded living environment.

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Why is Graça a nice place to live?

Living in Graça offers a unique experience that blends traditional Portuguese culture with a modern lifestyle.

This area, known for its historical charm and scenic views, has a lot to offer to its residents.

The lifestyle and culture in Graça are deeply rooted in Portuguese traditions, yet open to contemporary influences. The neighborhood is dotted with quaint cafes, traditional Fado music houses, and local artisan shops, creating a vibrant atmosphere.

It's common to see streets lined with colorful buildings and locals enjoying life at a relaxed pace, which adds to the area's charm.

Graça is also home to a growing expat community. This international presence brings diversity to the neighborhood, contributing to a cosmopolitan feel. Expats are often drawn to Graça for its cultural richness and the friendly nature of the locals. The community is known for being welcoming, making it easier for newcomers to integrate and feel at home.

When it comes to the cost of living, Graça, like many parts of Lisbon, can be relatively expensive compared to other regions in Portugal.

However, when compared to major cities in Europe and North America, it may still be considered more affordable. The cost of living here includes housing, which can vary depending on the property's size and condition, as well as daily expenses like food, transportation, and leisure activities.

Safety in Graça is generally good, with the area being considered safe for both residents and visitors. Like any urban area, it's always wise to be cautious and aware of your surroundings, but overall, the neighborhood maintains a peaceful and secure environment.

In terms of amenities and facilities, Graça is well-equipped. For educational needs, there are several schools in the vicinity, including both public and private options.

Healthcare facilities are also readily available, with hospitals like Hospital de São José and several clinics providing medical services. For shopping and leisure, the Feira da Ladra flea market and several shopping centers, including the Armazéns do Chiado, offer a variety of shopping experiences.

The quality of infrastructure in Graça is quite good. The roads and public utilities are well-maintained, ensuring comfortable living conditions. Internet connectivity is generally reliable and fast, catering to both residents and the working professionals in the area.

Accessibility is one of Graça's strong points. The neighborhood is well-connected to other parts of Lisbon, making it easy to travel around the city. Major transport hubs like Lisbon Airport are easily reachable by public transport or car.

Speaking of public transportation, Graça offers several options, including buses, trams (famous Tram 28), and metro stations nearby, facilitating convenient travel to and from the neighborhood.

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

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 a property in Graça can be an exciting prospect given the variety and charm of the properties available in this historic neighborhood.

The types of residential properties in Graça are quite diverse, including apartments, traditional houses, and in some cases, luxury villas. The area's architectural heritage is rich, showcasing a mix of old and new, which appeals to a wide range of buyers.

Apartments, especially those in historic buildings, are in high demand in Graça. This demand is fueled by the neighborhood's charming character, scenic views, and proximity to Lisbon's city center.

These apartments often feature unique architectural elements like azulejo tiles and ornate balconies, which add to their appeal.

The trend in recent years has been a mix of both new developments and resale properties. New developments tend to offer modern amenities and facilities, while resale properties often come with the allure of historical significance and traditional Portuguese architecture.

When it comes to pricing, the real estate market in Graça has seen significant changes over the years. Prices per square meter can vary widely depending on the property's size, condition, and exact location within the neighborhood.

Generally, you can expect prices to range significantly. It's important to note that property values in Graça have been on the rise, especially as Lisbon becomes an increasingly popular destination for international buyers and investors.

Looking ahead, there are several factors that could influence property values in Graça. The Lisbon city council occasionally announces developments or city planning changes, which can impact real estate markets.

Such developments might include infrastructure upgrades or new public amenities, which could make the neighborhood even more attractive to prospective buyers.

Predicting the real estate market's future in Graça, like any area, involves a degree of uncertainty. However, given the ongoing interest in Lisbon and its historic neighborhoods.

It's reasonable to expect that the demand for properties in Graça will remain strong. The neighborhood's unique blend of history, culture, and lifestyle appeal makes it an attractive option for both residents and investors.

Specific factors that indicate a potential increase in value for properties in Graça include the continued interest from international buyers, the finite availability of historic properties, and the general trend of rising property values across Lisbon.

Additionally, as urban renewal projects continue to enhance the neighborhood's appeal and accessibility, this could further drive demand and, consequently, property values.

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

Deciding on the best area to buy a property in Graça depends on what you're looking for in terms of atmosphere, property type, and your budget.

Graça is a neighborhood with diverse offerings, and different parts of it cater to different preferences.

Firstly, the area around the Miradouro da Senhora do Monte offers stunning views of the city. Properties here are highly sought after due to the panoramic scenery. The atmosphere is serene, and it's popular among those who appreciate a quieter lifestyle yet want to stay connected to the city.

The property types here range from traditional Lisbon apartments to refurbished townhouses. Due to its popularity and views, prices in this area tend to be on the higher side.

Another notable area is the vicinity of Vila Berta, known for its unique architectural style and community feel. This area has a mix of traditional and modern properties.

It’s slightly more affordable than the areas with direct city views but still offers the charm and character that is quintessential to Graça. For buyers interested in a blend of historical charm and modern living, this area is worth considering.

In recent years, there have been up-and-coming areas within Graça that have garnered interest from property buyers. One such area is around the Largo da Graça, which is undergoing gradual revitalization.

This area has become more attractive due to its blend of residential and commercial properties, local markets, and cafes, offering a vibrant urban living experience. Properties here are a mix of old and new, and prices are generally more accessible compared to the prime spots near the viewpoints.

If you are considering where to look for a property, areas near the historical tram line 28 route can be a good choice. These areas offer a quintessential Lisbon experience and are well-connected to the rest of the city.

Properties here are diverse, ranging from traditional to modern, and the atmosphere is lively, filled with the buzz of Lisbon's daily life.

On the contrary, some areas might not be advisable for certain buyers. Parts of Graça that are further away from the main public transport routes or major attractions might not appeal to those who prioritize convenience and accessibility.

Additionally, areas undergoing significant redevelopment might be subject to construction noise and disruption, which could be a downside for some.

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	Atmosphere	Property Types	Price Range	Notable Features
Miradouro da Senhora do Monte	Serene, scenic	Traditional apartments, townhouses	Higher	Stunning city views
Vila Berta	Community feel, unique	Traditional and modern properties	Moderate	Unique architectural style
Largo da Graça	Vibrant, urban	Mix of old and new properties	More accessible	Near local markets and cafes
Near Tram 28 route	Lively, typical Lisbon	Diverse range	Varies	Well-connected, classic Lisbon experience
Areas far from main transport	Less convenient	Varied	Potentially lower	May lack easy access to city attractions
Areas under redevelopment	Potentially disruptive	Varied	Varies	Subject to construction noise and changes

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Is there a strong rental demand in Graça?

In Graça there's indeed a strong demand for rental properties and understanding the nature of this demand is key for potential landlords or investors.

This demand is influenced by several factors, including the type of rental (short-term or long-term), target demographics, property types, and specific areas within Graça.

The rental market in Graça is dynamic, catering to both short-term and long-term rentals. Short-term rentals are particularly popular, driven by Lisbon's thriving tourism industry. Tourists and short-term visitors are attracted to Graça for its historic charm, scenic views, and cultural richness.

Properties with easy access to popular landmarks, good restaurants, and public transport are highly sought after for short stays. Areas like Miradouro da Senhora do Monte and Largo da Graça are particularly popular for short-term rentals due to their proximity to major attractions and vibrant street life.

On the other hand, the long-term rental market is primarily fueled by students, young professionals, and expatriates.

This demographic often seeks properties that offer a balance between traditional Lisbon charm and modern amenities. They tend to look for well-maintained apartments, often with one or two bedrooms, that are close to transportation links, as well as cafes, shops, and leisure facilities.

Specific amenities can significantly reduce vacancy rates in rental properties. Features like high-speed internet, modern appliances, air conditioning, and outdoor spaces (such as balconies with views) are particularly attractive.

For short-term rentals, furnished and well-decorated properties tend to be more appealing, as they offer a 'ready to live in' experience that's essential for tourists and short-term visitors.

Regarding potential returns on investment, properties in Graça can be quite lucrative, especially given the high demand for rentals. Estimations of returns vary, but for well-located and well-appointed properties, landlords can expect competitive rental yields.

Properties in prime locations with desirable amenities are likely to command higher rents, thus offering potentially better yields.

In terms of properties that are gaining more demand and could potentially offer better yields, renovated traditional apartments, especially those with unique architectural features like azulejo tiles, are increasingly popular. They offer the charm of historical Lisbon while providing the comfort of modern living.

Additionally, properties that cater to the needs of the short-term rental market, given its consistency and high turnover, can also be a wise investment.

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

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 in Graça, Lisbon as a foreigner is generally straightforward, but it's important to be aware of the nuances of the process, potential risks, and the importance of local expertise.

Firstly, Portugal does not impose any major restrictions on foreign property buyers. This openness has contributed to the popularity of Lisbon's real estate market among international investors.

However, as with any property purchase, especially in a foreign country, there are specific regulations and procedures to follow.

The purchasing process in Portugal involves several key steps. After finding a property, you'll need to obtain a Fiscal Number (Número de Identificação Fiscal or NIF), which is essential for all property transactions in Portugal.

The process then typically involves signing a promissory contract (Contrato de Promessa de Compra e Venda) and paying a deposit. This is followed by the completion of the sale with the signing of the deed (Escritura Pública de Compra e Venda) in front of a notary, and the payment of the remaining balance.

One of the primary risks associated with property investment in Graça is the potential for unforeseen maintenance issues, particularly with older properties.

Many buildings in Graça are historic, and while they offer charm and character, they may also require significant upkeep or renovation. It's also important to be aware of the local property market dynamics and legal requirements.

A common pitfall for foreign buyers in Portugal is underestimating the importance of legal due diligence. This includes ensuring clear property titles, understanding local planning and building regulations, and being aware of tax implications.

Unique to Portugal is the importance of ensuring that any renovation work on older properties adheres to the strict heritage preservation rules, especially in historic areas like Graça.

Working with a local real estate agent and a lawyer is highly advisable. A local agent can provide valuable insights into the Graça market, help navigate cultural and language barriers, and identify properties that meet your requirements.

A lawyer will ensure that all legal aspects of the transaction are handled correctly, which is crucial for a smooth property purchase experience.

As for exit strategies, property investors in Graça can consider a few options. One common strategy is to sell the property after a period of appreciation, capitalizing on Lisbon's rising real estate market.

Another is to rent out the property, either for long-term leases or as a vacation rental, providing ongoing income. The choice of strategy will depend on the investor's goals, market conditions, and the type of property purchased.