Is buying a property in Príncipe Real 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 admired the historic charm and upscale living of Príncipe Real, you might contemplate making this Lisbon neighborhood your next property investment.

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 Príncipe Real?

Príncipe Real, a charming and vibrant neighborhood in Lisbon, stands out as a highly sought-after location for property buyers, and for good reason.

It offers a unique blend of attributes that are hard to find elsewhere, contributing to its increasing popularity in the real estate market.

One of the key features that makes Príncipe Real so attractive is its perfect mix of historical charm and contemporary living. Unlike some other areas in Lisbon, Príncipe Real has beautifully preserved 19th-century mansions, which are now often converted into luxurious apartments.

This historical charm, combined with modern amenities, offers a living experience that's both rich in culture and convenient.

The neighborhood began gaining significant attention in the real estate market around the early 2000s. This surge in popularity can be attributed to its central location, proximity to Lisbon’s main attractions, and the vibrant lifestyle it offers.

Cafes, boutiques, and art galleries line its streets, providing an ambiance that's both lively and upscale. This is quite different from more tourist-centric areas like Alfama or Baixa, where the atmosphere can be more crowded and less residential.

Príncipe Real attracts a diverse group of people, from young professionals and artists to families and expatriates. Its cosmopolitan vibe, combined with the presence of high-quality schools and parks, makes it ideal for those seeking a blend of urban lifestyle and family-friendly environment.

However, every rose has its thorn, and Príncipe Real is no exception. The area's popularity has led to a significant increase in property prices, making it one of the more expensive neighborhoods in Lisbon. This could be a deterrent for some buyers, especially those on a tighter budget.

Additionally, while the area is bustling and lively, it might not suit those who prefer a quieter, more laid-back living environment.

In terms of future prospects, it's difficult to predict with certainty, but given its enduring charm and the continuous demand for properties in central Lisbon, Príncipe Real is likely to maintain its allure among property buyers.

However, as with any real estate market, changes in economic conditions and urban development can influence its popularity over time.

So, when considering Príncipe Real, it's important to weigh its historical charm, vibrant lifestyle, and central location against the higher cost of living and potential for busyness. It's a neighborhood that offers a unique slice of Lisbon life, appealing to those who seek a blend of tradition and modernity.

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Why is Príncipe Real a nice place to live?

Living in Príncipe Real, offers a unique and enjoyable experience, marked by a blend of lifestyle, culture, and convenience.

This area is characterized by its leafy streets, historical buildings, and a vibrant cultural scene, making it a delightful place to call home.

The lifestyle in Príncipe Real is both relaxed and cosmopolitan. The neighborhood is known for its charming antique shops, trendy boutiques, and delightful cafes, fostering a sense of community and leisure.

On weekends, you might find residents browsing local markets or enjoying picnics in the Jardim do Príncipe Real, a lush, well-maintained park that forms the heart of the area.

The expat community in Príncipe Real is quite significant, attracting a diverse mix of people from around the world. This international presence adds to the area's dynamic atmosphere, making it a melting pot of cultures and languages.

For expatriates, this means an easier transition, as many locals and fellow expats speak English and other languages.

However, the cost of living in Príncipe Real is relatively high compared to other parts of Lisbon. Property prices and rents in this area reflect its desirability and central location.

While this may be a consideration for some, the charm and amenities of the neighborhood often justify the expense for those who choose to live here.

Safety is another appealing aspect of Príncipe Real. It is generally considered a safe area, with a low crime rate and a reassuring presence of community and security. Residents often feel comfortable walking around the neighborhood, even late at night.

In terms of amenities and facilities, Príncipe Real does not disappoint. The area boasts several reputable schools, such as the Escola Secundária Passos Manuel, catering to families with children. Healthcare facilities are also readily available, with hospitals like the Hospital Santo António dos Capuchos nearby.

For shopping, the Embaixada, a unique shopping center housed in a historic Moorish Revival palace, offers a range of designer stores and artisanal products.

The infrastructure in Príncipe Real is well-developed, with well-maintained roads and reliable utilities. Internet connectivity is excellent, catering to both residents and the numerous small businesses in the area. This makes it an ideal place for those who work remotely or rely heavily on digital connectivity.

Accessibility is another strong point of Príncipe Real. The neighborhood is centrally located and well-connected to other parts of Lisbon.

It's just a short walk to the Baixa and Chiado districts, and there are numerous public transportation options, including metro stations such as Rato and Avenida. This connectivity extends to major transport hubs; for instance, Lisbon Airport is just a short drive or metro ride away.

Public transportation in Príncipe Real is comprehensive, with a range of options including metro, buses, and trams. The area is served by several bus routes, ensuring that residents can easily reach different parts of the city.

Additionally, the iconic Tram 28, which passes through the nearby Bairro Alto, provides a scenic route through some of Lisbon’s most historic neighborhoods.

Overall, Príncipe Real offers a blend of cultural richness, modern amenities, and a vibrant yet relaxed lifestyle. Its appeal lies in its ability to provide a high quality of life, combining the charm of old Lisbon with the conveniences of modern living.

While the cost might be higher than in other areas, many find that the benefits of living in such a dynamic and beautiful neighborhood are well worth it.

How much does it cost to buy real estate in Príncipe Real?

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 Príncipe Real varies in cost depending on several factors including the type of property and its specific location within the neighborhood.

Príncipe Real is known for its range of residential properties, including apartments, traditional houses, and some luxury villas. The area's historical charm and central location make it a highly desirable place to live.

In Príncipe Real, apartments are particularly in high demand. This is due to their practicality for urban living and the blend of traditional architecture with modern amenities that many of these apartments offer.

Buyers are often drawn to the character and uniqueness of renovated buildings that reflect Lisbon's rich history. Houses, while less common than apartments, are also sought after, especially those that retain original features and offer more space.

The neighborhood predominantly features resale properties, with beautifully restored buildings and some new developments. The blend of old and new properties adds to the area's appeal, providing options for buyers who appreciate historical charm or those who prefer modern, newly built residences.

Regarding prices, properties in Príncipe Real can be quite expensive compared to other areas of Lisbon. The price per square meter varies, but it's not uncommon to see properties ranging from around €5,000 to €10,000 per square meter.

The exact price depends on the property's size, condition, and specific location within the neighborhood.

Over recent years, property values in Príncipe Real have seen a steady increase. This trend is partly due to the neighborhood's growing popularity among both local and international buyers, driven by its central location, cultural vibrancy, and the quality of life it offers. The area has become particularly attractive to expatriates and investors, further fueling the demand for properties.

As for future developments, any upcoming city planning changes or new property developments could impact property values.

For example, improvements in infrastructure or the introduction of new upscale developments can increase property appeal, potentially driving up prices.

However, specific details about upcoming developments in Príncipe Real are subject to change and depend on the city's urban planning policies.

Predicting the real estate market's future in Príncipe Real can be challenging, but given its enduring popularity and limited space for new developments, property values are likely to remain high or possibly increase.

The neighborhood's appeal is sustained by its unique combination of historical significance, cultural richness, and prime location in Lisbon.

Factors indicating a potential increase in property value in Príncipe Real include its ongoing popularity among affluent buyers, limited availability of properties, and the general trend of property prices in Lisbon.

Additionally, as the neighborhood continues to attract international attention, this could further drive demand and property values.

Where is the best area to buy a property in Príncipe Real?

Determining the best area to buy a property in Príncipe Real depends largely on what you're looking for in terms of atmosphere, property type, and budget.

Príncipe Real is a diverse neighborhood, with different areas offering their own unique charms and characteristics.

The heart of Príncipe Real, around the Jardim do Príncipe Real, is known for its bustling atmosphere and beautiful 19th-century buildings. This area is a blend of residential and commercial spaces, with a lively vibe due to its variety of shops, restaurants, and cultural spots.

Properties here are often sought after for their historical charm and proximity to the park, making them quite pricey.

In terms of property types, you'll find a range of options in Príncipe Real. Near the garden and along the main streets, there are typically apartments in renovated historic buildings.

These apartments often feature traditional Portuguese architecture with modern renovations. The further away you move from the center, the more likely you are to find larger homes or newer developments.

As for up-and-coming areas within Príncipe Real, there aren't many hidden spots left, as the neighborhood is quite well-established and uniformly popular.

However, the areas bordering Bairro Alto and São Bento have been gaining more attention lately. They offer a slightly more relaxed atmosphere compared to the very center of Príncipe Real, while still being close to all the amenities.

When looking for a property, it's wise to consider areas like Rua da Escola Politécnica and Rua de São Marçal. These streets are known for their elegant buildings and proximity to both the park and various local amenities. Properties here offer a good balance between the vibrant city life and a more residential feel.

On the contrary, areas closer to the nightlife hubs, like the borders near Bairro Alto, might not be advisable for those seeking a quieter living environment.

These areas can get quite noisy, especially during weekends, which might be a concern for families or those looking for a more peaceful neighborhood.

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	Relative Prices
Heart of Príncipe Real (near Jardim do Príncipe Real)	Bustling, commercial and residential blend	Apartments in historic buildings	High
Bordering Bairro Alto	Lively, closer to nightlife	Mix of apartments and houses	Moderate to High
Bordering São Bento	More relaxed, residential	Larger homes, newer developments	Moderate
Rua da Escola Politécnica	Elegant, well-connected	Elegant buildings, proximity to amenities	High
Rua de São Marçal	Residential, quieter	Varied, including renovated apartments	Moderate to High

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Is there a strong rental demand in Príncipe Real?

Príncipe Real is experiencing a strong demand for rentals, a trend driven by its desirability as a residential area and its appeal to a diverse range of tenants.

The rental market in Príncipe Real is a mix of both short-term and long-term rentals, each catering to different demographics and preferences.

For short-term rentals, the target demographic primarily includes tourists and business travelers. Príncipe Real, with its central location, historical charm, and proximity to key tourist attractions in Lisbon, is highly attractive for those seeking a more authentic and upscale experience of the city.

Properties that are in high demand for short-term rentals are typically well-furnished apartments, often with modern amenities and a touch of local character.

Areas close to the Jardim do Príncipe Real and streets like Rua da Escola Politécnica are particularly popular, as they offer easy access to local cafes, shops, and cultural sites.

On the other hand, the long-term rental market in Príncipe Real caters to a different set of tenants. These are often expatriates, professionals working in Lisbon, and sometimes students from higher education institutions.

The properties they look for are usually apartments or small houses that offer a blend of comfort, functionality, and accessibility to workspaces and educational centers.

Areas slightly away from the main tourist hubs, such as those bordering São Bento, can be more appealing for long-term renters seeking a quieter residential experience.

Regarding amenities, features like high-speed internet, modern appliances, and proximity to public transport can significantly reduce vacancy rates.

In a neighborhood like Príncipe Real, where the blend of historical and modern is highly valued, properties that maintain their traditional charm while offering contemporary comforts are particularly appealing.

For short-term rentals, additional amenities like cleaning services, a well-equipped kitchen, and perhaps a guide to the neighborhood can make a property stand out.

The potential returns on investment for rental properties in Príncipe Real can be quite attractive. While specific numbers depend on a range of factors including the property's size, condition, and exact location, landlords in Príncipe Real can expect a healthy rental yield, particularly if they cater well to their target market.

Short-term rentals might offer higher returns but come with the caveat of increased management and higher turnover. Long-term rentals might offer more stability and consistent income.

In terms of properties gaining more demand and potentially better yields, renovated apartments that combine modern amenities with traditional Lisbon aesthetics are particularly popular.

Properties that offer outdoor spaces like balconies or terraces are also increasingly sought after, as they provide additional living space in an urban setting.

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Is it easy to buy a property as foreigner in Príncipe Real?

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 a property as a foreigner in Príncipe Real, Lisbon is generally straightforward, as Portugal has a relatively open and foreigner-friendly property market.

However, there are certain aspects and regulations that foreign buyers should be aware of to ensure a smooth purchasing process.

Firstly, there are no specific regulations or restrictions for foreign buyers in Portugal. People from all nationalities can purchase property in Portugal, and the process for foreigners is essentially the same as for Portuguese citizens.

This openness makes Príncipe Real, a popular and cosmopolitan neighborhood in Lisbon, an attractive option for foreign property investors.

The purchasing process in Príncipe Real follows the standard procedure in Portugal. It usually involves finding a property, agreeing on a price, performing due diligence, signing a promissory contract, and finally completing the purchase with a notarial deed.

One unique aspect of buying property in Portugal is the need for a Fiscal Number (Número de Identificação Fiscal or NIF), which is required for all property transactions. Foreign buyers must obtain this number from the Portuguese tax authorities.

Regarding risks, the primary concerns are similar to property investments elsewhere, such as market fluctuations and property values.

However, in an area like Príncipe Real, which is highly sought-after, there's also the risk of overpaying for properties, especially in a market with high demand. It's crucial to have a good understanding of the local market values to avoid this pitfall.

Common mistakes people face when buying property in Portugal, including Príncipe Real, often involve underestimating the importance of legal due diligence. This includes not thoroughly checking property titles, existing liens, or planning permissions.

Some properties, especially older ones, might have legal issues or unclear property histories that can complicate the transaction.

Working with a local real estate agent or lawyer is highly important, especially for foreign buyers who may not be familiar with the Portuguese property market or legal system.

A knowledgeable local agent can help navigate the market, find properties that meet your criteria, and negotiate prices. A lawyer can ensure that all legal aspects of the purchase are handled correctly, which is essential for a smooth transaction.

As for exit strategies, property investors in Príncipe Real typically consider either selling the property later at a higher price or renting it out.

The rental market in Lisbon is robust, and properties in Príncipe Real can fetch attractive rental returns, especially given the area's popularity among expatriates and tourists.

Selling the property is another viable strategy, particularly in a high-demand area like Príncipe Real, where property values have historically appreciated.