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My rental over in Funchal is 1375 euros.

Im having sticker shock in Funchal. I was there last year and thought I'd be able to afford a property there.
The prices have shot up so high that I'm not sure what I can afford. I can't believe it has gone up so much.
I'm moving there is January. I think that they will stop the golden visa in Funchal soon. Maybe then, the prices will stabilize. Rents are still better than the purchase prices.

Hello Joric! Thank you for the information. I did a scouting trip to Portugal for a move abroad/retirement and checked out Lisbon, Tavira, Porto, Evora and Coimbra. Lisbon is definitely expensive if near the center, yet going by Metro outside the city center, there will be cheaper properties. Porto is cheaper and so is Evora which are two cities that I enjoyed as well. My plan is to do the Digital Visa coming soon and live there for a year and see how the prices reflect changes in the economy and whether Portugal remains affordable. I appreciate your content! 🙏🏾

Thanks Joric for sharing the bad news. 😉 We’ve been considering areas outside Lisbon + other cities in PT for about a year now. We visited a few of these communities on our recent trip. Unless the real estate bubble bursts somewhat soon, the notion of living in Lisbon-proper will likely be a dream from us—particularly when the article you quote puts Lisbon as the 2nd most expensive city in Europe—very hard to believe IMHO. 💰 FYI—our plans also include a “Plan B” that doesn’t include PT—just in case. Always appreciate your work. 👍🏻 Cheers.

Repeating a discussion that I've already started in another channel, let's look at some details about investment ratios that I never see mentioned anywhere. Let's assume you buy a 400k euros apartment in the Lisbon/Oeiras area. Assuming enough square meters for a family of three (i.e., 90 m2), that amount will buy you a slightly better than average apartment, but don't expect anything really fancy, and definitely not newly built:

1) the real estate agency is charging 6,15% (5% + 23% VAT = 24,600.00), so the seller is actually selling the house for 375,400.00

2) the buyer is spending between 26k euros in taxes, deed, etc (if it's for primary residence), and 32k (if it's a second house)

3) so you've basically paid 430,000.00 for a 375,000.00 house

4) that house will be worth around 1,366.00 euros/month (16,400.00/year – 4.1% of 400k) in the rental market, an horrendously high price in a region (Lisbon/Oeiras) with an average income of around 1700/month (the average for the whole of Portugal is around 1300/month)

5) but although that rent is ridiculously high for Portuguese salaries, the investment/return ratio is actually pretty lousy. The landlord is getting 3.8% (on the 430k he effectively spent) before taxes and expenses, and probably little over a measly 2,0% after taxes and expenses (property tax, income taxes, contributions to HOA, maintenance expenses throughout the years, etc. – and I'm not even factoring in the risks associated with tenants who suddenly vanish, sell appliances or furniture, or destroy the interiors…)

6) inflation is presently 10%+, so your chances of earning any money (or at least not losing on your investment) are totally dependent on the house going up in price, but: a) that may or may not happen b) it needs to go up in price A LOT, because you started by paying 430k for a 375k flat and there might again be expenses at the moment of selling (most certainly if you use a realtor's services when selling, and also because the Portuguese State has a knack for charging taxes on profits that simply do not exist – unrealistic money devaluation tables, maintenance expenses that are not accepted for tax purposes, etc)

So, Portugal achieves the feat of having rents that are simultaneously surreal from the point of view of (Portuguese) tenants, and really lousy in terms of investment ratios.

How much is the ratio in the USA if you rent out a flat that you've bought for 430k Euros/USD? It is not 2%, is it?

Please feel free to leave your comments on this issue, I'm curious to know how foreigners view these numbers.

Totally agree! But, if you look hard I believe you can still find a deal…We did!!! Our mortgage is half or a third of what we'd pay for an apartment in Lisbon…We are only 25 mins to the center and have a beautiful home in a beautiful area with a fixed rate mortgage! I am pinching myself…

Great video! Thank you for sharing. We were looking in the Areeiro neighborhood. They were expensive even old and not updated apartments

Property😂 prices globally may dip or crash due to massive recession snd interest rate hikes. Herd landing ahead ? Ugh