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 Porto's property market is included in our pack
Considering buying real estate in Porto? You're not alone!
Many people are enchanted by Porto's historic charm and dream of owning a cozy apartment or a stylish townhouse in this city.
Is it worth investing there, though? Are property prices increasing in Porto? What is the price per sqm? Should I buy property in the Ribeira or Cedofeita? What are the property taxes? What yields can I expect?
We know the answers.
The Investropa team has done their homework on this market. Actually, we've compiled all our findings in one pack. Get it now.
In this article, get ready to receive valuable insights from us.
How is the real estate market in Porto?
What's happening with the property market? Some say it's going up, others say it's going down. Our approach is distinct—we rely on fresh data and stats to reach the correct conclusions.
Types of properties
In Porto, you can find various types of properties available for sale.
These include apartments with different sizes and styles, ranging from cozy studios to spacious multi-bedroom units. There are also charming townhouses and traditional houses with unique architectural features.
For those seeking more space, you'll discover modern villas and homes on the outskirts of the city.
Additionally, commercial properties like shops and offices are also on the market, catering to different investment needs.
Whether you're looking for a comfortable home or a business opportunity, Porto offers a diverse range of properties to choose from.
What's better: buy or rent?
(If you plan to use it yourself and not as a rental)
If Porto is your home or a place you're planning to relocate to, you may be contemplating the buy vs. rent decision in this charming Portuguese city.
Obviously, it's better to buy if you are looking for a long-term investment and want to build equity in your property.
To make a good decision, look at the property price-to-rent ratio. It's a simple way to gauge the impact of rental earnings on covering the property's cost.
According to Numbeo, the property price-to-rent ratio in Porto is around 15.51, which is below the world average.
In simple terms, it would typically require 16 years of rental payments, on average, to buy a property in Porto. If you plan to stay that much (or even less, since you can re-sell), it's better to buy.
Property prices in Porto
On average, according to the last data from Statistics Portugal, purchasing a property in Porto would cost you around $3,120 per square meter.
Naturally, prices are quite spread out. The value of a square meter for a riverfront property in Porto might differ from an apartment in the city center. We actually offer a more in-depth analysis in our pack for buying property in Porto and in Portugal.
To put things in perspective, it means that, instead of buying an apartment in Paris or London, you can afford 4 properties in Porto.
Also, housing prices in Porto are 48% cheaper than in Lisbon.
The most expensive neighbourhoods in Porto are probably Boavista, Cedofeita, and Foz do Douro, while the cheaper neighbourhoods are probably Bonfim, Massarelos, and Paranhos.
Trends
First and foremost, we have to acknowledge 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.
Consider this when wondering if it's a good investment to buy a property in Porto.
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 intend to invest in real estate in Porto it's a positive signal because when the economy grows, people often 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 is a strong positive signal: housing prices in Porto might become more expensive in 2024 and later on.
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 Porto
Buying real estate in Portland can be difficult due to the lack of reliable and up-to-date information available about the process. That's why we have created the pack to buy property in Porto and in Portugal.
Buying process
In our pack, we've explained the entire buying process in detail. We've provided clear information about prices and yields based on the area, guidance on negotiating the price, and options for securing a mortgage.
Now, we're offering you a simpler version, step-by-step, to make it easier for you to grasp.
This is the step-by-step process to purchase a property in Porto, Portugal:
- Research the Porto property market and set a budget in Euros.
- Engage a licensed real estate agent with knowledge of local regulations.
- View properties, considering areas like Ribeira, Foz, and Boavista.
- Perform due diligence, including obtaining a Caderneta Predial Urbana (property tax certificate).
- Secure mortgage or financing through a Portuguese bank, if needed.
- Make a written offer through the agent, including the Contrato de Promessa de Compra e Venda (preliminary sales agreement).
- Negotiate the purchase price and conditions, considering the IMI (property tax) and IMT (property transfer tax).
- Sign the Contrato de Promessa de Compra e Venda with the seller, usually with a down payment of 10% of the property value.
- Hire a solicitor to conduct legal checks and obtain a Certidão de Teor (property registry search).
- Finalize the Escritura (final deed) at a notary's office, paying the remaining balance and transfer taxes.
- Obtain a comprovativo de registo predial (proof of property registration) and update utilities and services.
- Register the property in your name at the Conservatória do Registo Predial (Land Registry) to complete the purchase.
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.
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Where to find a property
Check out these websites to find properties in Porto.
- Casthelana Real Estate - A real estate agency specializing in property sales and rentals in Porto, Portugal, offering a variety of apartments and houses.
- Home lovers - A real estate website offering properties for sale and rent in Portugal, including Lisbon, Porto, Cascais, Comporta, and Madeira.
- Idealista - A property website offering over 160,769 properties for sale in Portugal, including popular regions like Algarve and Lisbon.
- Portugal Homes - A real estate agency offering 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 properties?
As mentioned before, the average price per sqm in Porto is $3,120. A 1-bedroom property with 60 square meters of space would cost approximately $187,000, and a 2-bedroom property with 85 square meters of space would cost around $265,000.
However, as you can guess, property prices will differ based on the attributes of the property and its specific location.
Expect property prices to be on the higher side in the premium areas of Porto. If you're considering Foz do Douro, a house could be around $590,000, but a condominium in Nevogilde could be priced at $330,000.
On the other hand, certain areas are friendlier to your budget. You might discover a property in Paranhos for $150,000, or you could find a property in Ramalde priced at only $120,000.
We give a more detailed pricing list in our full pack for buying property in Portugal.
Risks and pitfalls
Here are the main pitfalls when buying a property in Porto, Portugal:
- Outdated seismic standards: Older properties may not meet modern earthquake safety requirements.
- Protected areas and historical restrictions: Some properties may have limitations due to their historical or cultural significance.
- Complex property inheritance laws: Inheriting properties can involve intricate legal processes and taxes.
- Local tax variations: Property taxes differ across Porto's municipalities, affecting overall costs.
- Unpermitted short-term rentals: Some areas have strict regulations on Airbnb-type rentals.
- Coastal erosion risks: Properties near the coast might face erosion challenges and insurance complications.
- Urban regeneration projects: Check future redevelopment plans that could impact your property's surroundings.
- Non-EU citizen restrictions: Foreign buyers from outside the EU may face specific legal limitations.
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 Porto
Living in Porto is a great experience, with beautiful landscapes, a vibrant cultural scene, and a relaxed atmosphere that make it an ideal place to buy property.
Cost of living
The cost of living in Porto is generally considered to be quite affordable compared to other larger cities in Europe. Prices for food, housing, and entertainment are generally lower than the European average.
Here are some examples to better understand the cost of living in Porto, Portugal:
- A glass of Port wine (e.g., Taylor's or Sandeman) at a local wine bar: $5-$10.
- Rent for a one-bedroom apartment in the picturesque Ribeira neighborhood: $600-$1,000 per month.
- Monthly Andante public transportation pass for zones Z2: $35-$55.
- A bottle of Super Bock beer at a grocery store: $1.50-$2.00.
- Utilities (electricity, heating, cooling) for an 85m² apartment in Porto: $80-$120.
- A francesinha, a famous Porto sandwich, at a local restaurant: $8-$12.
- Entrance fee to Livraria Lello, a historic bookstore featured in Harry Potter: $5-$10.
- Health insurance coverage for a family of four: $100-$200 per month.
Neighbourhoods
Since we want to share information in a clear and reader-friendly way, we've created a summary table outlining the different neighborhoods in Porto. For yields, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
1. Ribeira | Ribeira is a historic district located along the Douro River, known for its charming old buildings, lively atmosphere, and scenic views. | Rich cultural heritage, picturesque streets, waterfront dining, and proximity to major attractions. | Can be crowded with tourists, limited parking options, and some areas can be noisy. |
2. Foz do Douro | Foz do Douro is an upscale neighborhood with beautiful beaches, upscale dining options, and a relaxed ambiance. | Breathtaking ocean views, elegant promenade, proximity to the beach, and upscale lifestyle. | Higher living costs, limited public transportation options, and can get crowded during peak tourist seasons. |
3. Cedofeita | Cedofeita is a trendy and bohemian district with a vibrant arts scene, diverse shops, and lively nightlife. | Hipster vibe, cultural diversity, abundance of cafes and boutiques, and good public transportation connections. | Some areas might be a bit run-down, noise from nightlife, and limited green spaces. |
4. Bonfim | Bonfim is an up-and-coming neighborhood with a mix of traditional and modern elements, offering affordable living options and a friendly community. | Affordable housing, local markets, community feel, and potential for future development. | Some parts might still be underdeveloped, limited amenities, and few green areas. |
5. Miragaia | Miragaia is a charming historic area with narrow streets, historic landmarks, and a peaceful ambiance. | Authentic atmosphere, close-knit community, historic charm, and proximity to the riverfront. | Limited parking options, narrow streets can be difficult for driving, and fewer modern amenities. |
6. Boavista | Boavista is a modern and bustling neighborhood with a mix of commercial and residential areas, known for its shopping, business centers, and entertainment. | Wide range of amenities, excellent shopping options, cultural attractions, and well-connected transportation. | Can be crowded and noisy, higher living costs, and lack of green spaces. |
7. Paranhos | Paranhos is a diverse neighborhood, home to the University of Porto and various student communities, with a blend of residential and commercial spaces. | Close to university facilities, affordable housing options, good public transport connections, and a lively student atmosphere. | Some areas can be crowded and noisy, limited parking, and occasional student-related disturbances. |
8. Campanhã | Campanhã is a historic neighborhood with a mix of industrial and residential areas, known for its train station and cultural heritage. | Transportation hub, affordable housing, historical landmarks, and easy access to the city center. | Some areas may feel run-down, industrial zones with pollution, and limited green spaces. |
9. Miraflores | Miraflores is a modern and affluent neighborhood with a mix of residential buildings, shopping centers, and green spaces. | Upscale living, beautiful parks, good schools, and well-planned urban design. | Higher living costs, heavy traffic during rush hours, and limited historical charm. |
10. Massarelos | Massarelos is a charming district with a mix of old and modern architecture, featuring the Crystal Palace Gardens and other cultural attractions. | Scenic parks, historic sites, riverside location, and a peaceful residential environment. | Some areas may lack amenities, limited parking options, and hilly terrain. |
Life in Porto
Porto's economy is mainly based on the services sector, which accounts for 80% of its GDP. Tourism, finance, and retail are the most important economic activities in the city, and the Port wine industry is also a major contributor to the economy.
What expats usually like the most in Porto is the city's vibrant culture, with its unique architecture, delicious food, and welcoming people. They also appreciate the city's stunning views of the Douro River and the Atlantic Ocean.
Regarding safety, the crime rate of Porto is around 33, which is a fairly good score. Porto has a strong police presence and a low poverty rate, which contributes to its low crime rate.
A good point for a property investor - Porto has a modern mass rapid transit system called Metro do Porto.
Access to healthcare in Porto is more than excellent, with a Healthcare Index of 79. An effective healthcare infrastructure always boost the appeal of a place, which is good for real estate.
Finally, it is worth noting that the University of Porto ranks among the top 500 universities in the world.
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Renting out in Porto
This section is for you if you want to buy property solely for renting out and earning income.
Long-term
Tenant Profiles in Porto
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 Porto, 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 young professionals, students, and expats, as these are the most common demographics in Porto. Additionally, retirees and digital nomads are also becoming increasingly popular in the area.
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 Baixa | Professionals, students | City center living, cultural attractions | $800 - $1,500 |
Townhouse in Foz do Douro | Families, expats | Beachfront, upscale lifestyle | $1,500 - $3,000 |
Apartment in Paranhos | Students, young professionals | Near university, local amenities | $600 - $1,200 |
Studio in Ribeira | Artists, tourists | Historic district, river views | $500 - $1,000 |
Apartment in Cedofeita | Young professionals, couples | Trendy neighborhood, cafes | $800 - $1,800 |
Studio in Campanhã | Commute-conscious tenants | Easy access to train station | $500 - $1,000 |
Apartment in Vila Nova de Gaia | Families, wine enthusiasts | Wine cellars, riverfront | $700 - $1,500 |
Rental yields
Nowadays, the rental yields you get in Porto are between 5% and 7%. There are some opportunities. For a "good" rental yield, you should aim for 7% or more.
Rental yields in Porto are generally higher for properties located in the city center, due to their proximity to amenities, transportation, and tourist attractions. Apartments with multiple bedrooms and bathrooms, especially in the historic districts, tend to have the highest rental yields.
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 Porto are taxed at 28%, which is relatively high.
Short-term
You could also decide to rent short-term to tourists visiting Porto, or to students attending one of the universities in the city. Business travelers and professionals attending conferences may also be interested in renting short-term in Porto.
If you decide to go with that option, look for properties in the Ribeira district, as well as in the Foz do Douro and Boavista neighborhoods. These areas are known for their lively atmosphere and close proximity to the city center.
Currently, there are approximately 9,000 active Airbnb listings in Porto, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $103.
You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Porto can make around $2000 per month. Also, the average occupancy rate is estimated at 86%.
Is it worth buying real estate in Porto then?
Absolutely, buying property in Porto is a fantastic idea if you're planning to make it your long-term home or if you're seeking an investment opportunity with the potential for property appreciation and rental income.
Porto's property market offers a favorable price-to-rent ratio, making it financially attractive for those who want to build equity over time.
Moreover, the city's stable economy and the expected GDP growth signal a positive outlook for property values in the coming years.
The affordable cost of living in Porto, in comparison to other European cities, means you can get more for your money when purchasing a property.
If you're interested in renting out your property, Porto caters to a diverse pool of tenants, including young professionals, students, and expats, with rental yields ranging between 5% and 7%.
The vibrant tourism scene also presents a lucrative opportunity for short-term rentals, potentially generating additional income.
However, if you're planning a short stay in Porto or have doubts about your long-term commitment, buying property may not be the wisest choice. The complexities of the buying process, especially for non-EU citizens, can pose challenges, and Porto's relatively high rental income tax rate of 28% can impact your profitability. Additionally, uncertainties in the property market and the potential for unexpected market shifts should be considered. In such cases, renting could provide a more flexible and hassle-free option. Ultimately, your decision to buy or not should align with your specific goals, financial situation, and commitment to Porto, as well as your appetite for risk and willingness to navigate the intricacies of the property market.
Make sure you understand the real estate market in Porto
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.