All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.
Yes, the analysis of Lagos' property market is included in our pack
Thinking of investing in real estate in Lagos? You're not alone!
Many people are intrigued by Lagos' coastal appeal and dream of owning a beachfront property or a stylish condominium in this city.
Would it be a profitable investment, though? Are property prices going up in Lagos? What is the current trend? Should I buy property in the city center or in Meia Praia? What about the taxes? Where are the best yields?
We've figured it out for you.
The Investropa team knows this market inside and out. As a matter of fact, we've put all our findings together in a pack. Get it now.
In the lines below, we'll share useful information and some practical tips.
How's the property market in Lagos?
How is the property market faring? Let's gather and interpret the data to know for sure.
Types of properties
In Lagos, Portugal, you can explore a range of properties up for sale.
These encompass modern apartments, traditional Portuguese townhouses, spacious villas, and sometimes empty land for building.
These properties are scattered throughout the town, with some nearer to the coastline and others more inland. The pricing varies significantly based on factors like the property's size, its proximity to beaches, and its overall condition.
Wandering through the charming streets of Lagos, you'll encounter properties showcasing diverse architectural styles, from historic to contemporary.
Buy or rent?
(If you're purchasing for personal use and not for renting)
If Bali is your city of choice, you might be considering whether it's better to buy a property or opt for renting in this picturesque Indonesian island paradise.
Without a doubt, it's better to buy if you want to build long-term wealth and take advantage of potential appreciation in the property value.
Actually, the property price-to-rent ratio is a good metric to look at for this kind of decision. This helps you understand the connection between rental income and the property's current price in terms of years.
According to Numbeo, the property price-to-rent ratio in Lagos is around 19.07, which is quite average.
In simple terms, it would typically require 19 years of rental payments, on average, to buy a property in Lagos. If you plan to stay that much (or even less, since you can re-sell), it's better to buy.
Property prices in Lagos
On average, according to the last data from Statistics Portugal, purchasing a property in Lagos would cost you around $4,000 per square meter.
Obviously, there is a huge spread. A property in the Lagos city center in Portugal might have a different price per square meter than a villa in Praia da Luz. We actually give you a more detailed breakdown in our pack for buying property in Lagos and in Portugal.
To give you some context, it means that, instead of buying an apartment in Paris or London, you can afford 3 properties in Lagos.
Also, housing prices in Lagos are 33% cheaper than in Lisbon.
The most expensive neighbourhoods in Lagos are probably Ikoyi, Lekki, and Victoria Island, while the cheapest neighbourhoods are likely Ajegunle, Agege, and Bariga.
Trends
First and foremost, we have to recognize that Portugal is, today, one of the most stable countries in the world. The last Fragile State Index that has been reported for this place is 27.5.
Don't ignore this when weighing the pros and cons of buying a property in Lagos.
Also, according to the International Monetary Fund (IMF), Portugal's economy is expected to soar by 7.9% in the coming 5 years, resulting in an average GDP growth rate of 1.6%.
If you want to invest in real estate in Lagos it's a good thing because, when people experience an increase in wealth, it typically translates to a surge in housing costs.
Also, in Portugal, the average GDP per capita has changed by 5.0% over the last 5 years. It's a solid number.
This data is a positive signal - housing prices in Lagos might soar in 2024 and after that.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Portugal right now.
Buying property in Lagos
Buying real estate in Lagos can be difficult due to the lack of reliable and up-to-date information about the market. That's why we have created the pack to buy property in Lagos and in Portugal.
Buying process
In our pack, we've laid out all the steps involved in the buying process, including the required documents, taxes to be paid, and guidance on finding properties.
Now, we're giving you a more straightforward version to help you grasp the information more easily.
This is the step-by-step process to purchase a property in Lagos, Portugal:
- Research Lagos property market and preferred neighborhoods.
- Engage a local real estate agent familiar with Lagos regulations.
- Visit properties, considering unique coastal views and proximity to beaches.
- Negotiate price and terms, considering the allure of Lagos as a prime tourist destination.
- Hire a Portuguese lawyer well-versed in Lagos property laws.
- Obtain a Portuguese Tax Number (NIF) for official transactions.
- Sign the Promissory Contract (Contrato Promessa de Compra e Venda) and pay a deposit (sinal).
- Conduct due diligence on the property's legality and permits, crucial in Lagos' coastal region.
- Sign the Escritura (deed) at a notary's office, with the involvement of the local Land Registry (Conservatória do Registo Predial).
- Pay the remaining balance, transfer taxes, and IMI (property tax) specific to Lagos municipality.
- Register the property at the Lagos Land Registry, including the energy performance certificate (Certificado Energético).
- Transfer utility contracts and ownership details to your name, completing the process to own a property in beautiful Lagos.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Portugal.
Make a profitable investment in Lagos
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Where to find a property
Explore these websites to find properties in Lagos.
- Casthelana Real Estate - Specializes in property sales and rentals in Porto, Portugal, offering a variety of apartments and houses.
- Home lovers - Offers properties for sale and rent in Portugal, including Lisbon, Porto, Cascais, Comporta, and Madeira.
- Idealista - Provides over 160,769 properties for sale in Portugal, including popular regions like Algarve and Lisbon.
- Portugal Homes - Offers a wide range of properties for sale in Portugal, including Golden Visa properties.
- Properties in Portugal - Browse over 40,000 properties for sale, including apartments, villas, lands, and commercial properties.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Portugal.
What you can get
As mentioned before, the average price per sqm in Lagos is $4,000. A one-bedroom property with an area of 60 square meters would cost approximately $240,000, and a two-bedroom property with an area of 85 square meters would be approximately $340,000.
However, prices will differ based on the attributes of the property and its specific location.
Prime property locations in Lagos tend to come with higher price points. A residence in Meia Praia might cost you around $970,000, whereas an apartment in Porto de Mós could be priced at $430,000.
Of course, some areas are cheaper. You may find a residence in Lagos for $400,000, or a residence in Albufeira priced only at $250,000.
We give more details about property types and areas in our full pack for buying property in Portugal.
Common mistakes
Here are the main pitfalls when buying a property in Lagos (Portugal)
- Ignoring the potential impact of coastal erosion and flooding on the property's value and safety.
- Overlooking the strict regulations for short-term rentals that may limit income opportunities.
- Neglecting to verify if the property has a habitation license, essential for legal occupancy.
- Failing to consider the specific property taxation laws in Portugal, such as the IMI and IMT taxes.
- Underestimating the costs and bureaucracy involved in obtaining a Golden Visa for non-EU buyers.
- Disregarding the age and condition of the property, as historical buildings may have preservation restrictions.
- Overlooking the implications of owning property in a popular tourist destination on infrastructure and noise.
- Not understanding the nuances of the local property market, which may differ significantly from other regions in Portugal.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Portugal Property Pack
Living in Lagos
Life in Lagos, Portugal is a vibrant mix of culture, history, and natural beauty, making it an ideal place for those looking to buy property and experience the best of Mediterranean living.
Cost of living
The cost of living in Lagos is very high due to the city's high population density and limited resources. The cost of basic necessities such as food, housing, and transportation is significantly higher than in other cities in Nigeria.
Here are some examples to better understand the cost of living in Lagos, Portugal:
- A glass of Portuguese Vinho Verde at a beachfront bar: $4-$6.
- Rent for a one-bedroom apartment in the historic center of Lagos: $700-$1,200 per month.
- Monthly Viva Viagem public transportation pass for Lagos urban area: $40-$60.
- A bottle of Sagres beer at a local grocery store: $1.50-$2.00.
- Utilities (electricity, heating, cooling) for an 85m² apartment in Lagos: $80-$120.
- A pastel de nata (Portuguese custard tart) at a local bakery: $1-$2.
- Entrance fee to Ponta da Piedade, a famous natural rock formation: $3-$5.
- Health insurance coverage for a family of four: $100-$200 per month.
Neighbourhoods
We like to show information in an easy-to-understand way. So, we made a table to list the different areas in Lagos (Portugal)s, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
1. Meia Praia | Meia Praia is a popular neighborhood in Lagos known for its long sandy beach and beachfront restaurants. | Beautiful beach, seaside dining options, water sports activities, and proximity to the city center. | Can get crowded during peak tourist seasons, limited parking, and higher accommodation costs near the beach. |
2. Lagos Old Town | Lagos Old Town is the historic center of the city, featuring charming cobbled streets, historic buildings, and a vibrant atmosphere. | Rich cultural heritage, diverse dining options, lively nightlife, and proximity to major attractions. | Some areas might be noisy, limited modern amenities, and narrow streets can be challenging for driving. |
3. Praia da Luz | Praia da Luz is a relaxed and family-friendly neighborhood with a beautiful beach, palm tree-lined promenade, and various water sports activities. | Tranquil atmosphere, scenic beach, good selection of restaurants and cafes, and water sports opportunities. | Can be less lively during the off-season, limited public transportation, and fewer cultural attractions. |
4. Porto de Mós | Porto de Mós is a peaceful residential area with a stunning beach, sea cliffs, and upscale accommodations. | Beautiful beach, upscale resorts, natural surroundings, and proximity to Ponta da Piedade. | Less variety in dining and entertainment options, limited public transport, and fewer shops in the vicinity. |
5. Alvor | Alvor is a charming village near Lagos, offering a mix of traditional fishing village ambiance, beautiful beaches, and a variety of restaurants. | Picturesque village, stunning coastline, authentic dining experiences, and peaceful environment. | Distance from Lagos city center, limited nightlife, and public transportation might be infrequent. |
6. Burgau | Burgau is a quaint fishing village with narrow streets, a lovely beach, and a laid-back vibe. | Charming fishing village atmosphere, beautiful beach, tranquility, and scenic coastal walks. | Limited public transport, minimal shopping options, and can be quieter during the off-season. |
7. Sagres | Sagres is a remote neighborhood known for its rugged coastline, surfing spots, and the historic Fortaleza de Sagres. | Spectacular cliffs and beaches, excellent surfing opportunities, historic landmarks, and a relaxed atmosphere. | Remote location, limited amenities, and can be windy due to its exposed position. |
8. Almadena | Almadena is a traditional village near Lagos, offering a peaceful and authentic experience with narrow streets and local charm. | Authentic village atmosphere, tranquility, and proximity to beautiful natural spots like Praia da Luz and Burgau. | Limited commercial facilities, fewer accommodation options, and a car may be necessary for convenience. |
9. Espiche | Espiche is a small village with a focus on sustainability and natural beauty, offering a tranquil escape from the bustling city life. | Eco-friendly initiatives, scenic surroundings, proximity to Praia da Luz, and a relaxing atmosphere. | Limited public transport, few dining options, and not as bustling as other Lagos neighborhoods. |
Life in Lagos
Lagos has one of the most vibrant and dynamic economies in Africa. It is a major hub for finance, commerce, and industries such as oil, construction, and entertainment, and is home to a large population of entrepreneurs and small businesses.
What expats usually like the most in Lagos is the vibrant nightlife and the beautiful beaches. They also enjoy exploring the city's many cultural attractions, such as the National Museum, the National Theatre, and the National Gallery.
A good point for a property investor - there is a mass rapid transit system in Lagos called the Lagos Rail Mass Transit.
A negative point: access to healthcare in Lagos is limited due to inadequate infrastructure and limited resources.
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Renting out in Lagos
For those aiming to buy property solely for renting out and earning income.
Long-term
Tenant Profiles in Lagos
According to the data reported by Wikipedia, the home ownership rate in Portugal is 78%, which is average.
It means that, if you decide to buy and rent out in Lagos, there will be a good number of people who can become your potential tenants.
If you decide to buy and rent out to long-term tenants, you should target professionals, expats, and students in Lagos, as well as families seeking a more affordable option than the high-end residential areas. For short-term rentals, you should target business travelers, tourists, and other people looking for an affordable place to stay in the city.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Apartment in Lagos Center | Tourists, expats | Central location, proximity to attractions | $800 - $1,500 |
Villa in Meia Praia | Families, retirees | Beachfront, spacious living | $1,200 - $2,500 |
Apartment in Porto de Mós | Tourists, beach lovers | Close to beach, ocean views | $900 - $1,800 |
Studio in Alvor | Artists, digital nomads | Quaint town, creative atmosphere | $600 - $1,200 |
Apartment in Praia da Luz | Retirees, families | Relaxed coastal living | $800 - $1,800 |
House in Odiáxere | Locals, nature enthusiasts | Rural charm, outdoor space | $700 - $1,500 |
Apartment in Burgau | Beachgoers, families | Seaside village, tranquility | $800 - $1,500 |
Rental yields
Nowadays, the rental yields you get in Lagos are between 5% and 7%. There are some opportunities. For a "good" rental yield, you should aim for 7% or more.
In Lagos, rental yields tend to be highest in neighbourhoods with good infrastructure and amenities such as good public transport links, good schools, and good access to shopping and leisure facilities. This is because these locations tend to attract higher rental demand from tenants, leading to higher rental yields for landlords.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in Lagos are taxed at 28%, which is relatively high.
Short-term
You could also decide to rent short-term to business travellers, tourists, or students looking for somewhere to stay temporarily in Lagos. Digital nomads and remote workers in need of an office space for a short period of time are also potential tenants.
If you decide to go with that option, look for properties in Lagos Island, Ikoyi, and Victoria Island. These areas are highly sought after by short-term tenants due to their proximity to the city centre and other attractions.
Currently, there are approximately 4,000 active Airbnb listings in Lagos, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $127.
You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Lagos can make around $1800 per month. Also, the average occupancy rate is estimated at 80%.
Is it worth buying real estate in Lagos (Portugal) then?
Buying a property in Lagos, Portugal, can be a fantastic decision for some and a terrible one for others. Let's get straight to the point.
If you're planning to settle down in Lagos for the long haul and build wealth through property ownership, buying makes sense. The property market in Lagos offers diverse options, from modern apartments to charming villas. Plus, Portugal's stable economy and expected growth bode well for property appreciation. If you're in it for the long run, you'll likely see your investment grow.
Moreover, property prices in Lagos are relatively affordable compared to major European cities, making it feasible to own multiple properties or a larger home without breaking the bank.
However, if you're just passing through or unsure about your financial stability, buying might not be the wisest choice. Short-term stays may not justify the upfront costs associated with purchasing property, and market volatility can make property investment a risky gamble.
Additionally, neglecting crucial factors like coastal erosion, property regulations, and local taxation laws can lead to unexpected expenses and complications. In such cases, renting may offer greater flexibility and peace of mind. In essence, whether buying a property in Lagos is a good idea depends on your commitment, financial situation, and understanding of the local market intricacies. It's a decision that should be made with careful consideration and tailored to your specific circumstances.
Make sure you understand the real estate market in Lagos
Don't rush into buying the wrong property in Portugal. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.