Will real estate resale prices fall over 6 years? 350K/500K Euro

What real estate option makes sense? GV350k or a 500k property? I checked the property prices in Porto, the cost per sqm of secondary sale properties is much cheaper than a GV350k property. Six years down, will we be able to sell a GV350k property at the price we are buying now? Looks very unlikely. At least, a 500k property seems to be more in line with normal market prices. Any advice?

Anil,
It seems you may be misinformed. There is not necessarily a “GV350k property”. You can buy any property you want to qualify for the GV as long as it meets the price requirements.

No one can predict real estate prices in the future, but historically real estate has appreciated over time.

The OP is implying that any property around 350K is a GV property because of the demand for properties at that price point by GV investors.

I see. Well, the comment does not make sense because the demand for real estate at 500k is probably more in demand and manipulated for the same reasons. It is just basic economics… supply and demand and well as sellers taking advantage of the price requirements, so it should not be any type of surprise that a house priced at 350k or 500k is not likely to be a bargain.

It is hard to know how to respond to the question because naturally if one overpays for a property, that person is less likely to make a profit in the future. I mean, the question practically answers itself.

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My understanding is that 350K properties need to >30yrs old and refurbished in order to qualify under GV program. So, I received a lot of listings from players like La Vida that show qualifying 350K properties. Please check this website: https://www.goldenvisas.com/investment/portugal

So, for a lot of these listings, the cost/sqm is extremely high compared to normal properties that I researched on other websites that had nothing to do with GV program. That led me to think that these GV listings are over-priced compared to ‘normal’ property listings…

Just to close out my mention of a 500K property; any property costing 500K and above qualifies for a GV and need not fall under the 30yr/refurbished criteria. Hence my logic was a 500K property would be more in line with the ‘normal’ market price.

That is kind of my thinking as well. We are going with Global Citizen Services for real estate and GV. We’ve decided to look for the 500Euro place in hotel/resort communities in part because 1) we live in NYC, so that really is not so much different a price than if we were buying an investment property to rent out in the city or even in parts of rural NY like the Hudson valley, and 2) Even though we could probably buy a nice house or even apartment for less (but in an area where less might not be enough for the GV), handing over maintenance and rental to the hotel management company is just a lot easier for us at this point. If/When we decide to move to Portugal for retirement or whatever reason after we have permanent residency or citizenship, we can decide then if we want to stay in that location or buy a “normal” place. As a resort location, I’m thinking that it might not be too difficult to sell to people who basically want a similar situation.

I don’t really agree with the premise that there is big demand among GV applicants for “ruins” or 30 year old houses needing renovation. I have not seen or heard that to be the case. I may be wrong, but you are talking about mostly Chinese, Turkish buyers and I seriously doubt that they are moving to Portugal with the idea of renovating a property. Keep in mind that if someone is pursuing a GV, they generally aren’t planning to live in the country so it doesn’t make sense that they would want to manage a construction project. If you look at the properties being pushed to GV, a lot of it is new construction.

I also don’t think the 500k property will be in-line with normal prices for the same and more reasons you mentioned. Once you get over 600k or even 1MM that is more likely to be the case.

Thank you for your reply Michael.

Thank you for your reply Courtney.

hi,
seems sense, then how one should proceed. any comments?

thanx

One thing to keep in mind with RE in all countries that offer it for GV is that there is a chance that the properties are priced to meet the min requirement for the GV program.

Personally I would assume you are automatically going to be overpaying if you are sourcing property via GV agencies. Imho, you would be much better off sourcing your own options through something like Idealista and/or the english language versions of the main estate agent websites in Portugal (such as Remax).

Virtually all estate agents in Portugal I have ever dealt with speak some English and are easy to deal with directly.

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I’ve gone into two real estate agencies and there have been people there who speak English. One even set up a meeting at a bank to talk with someone about a mortgage!

I 've met an American who is buying an apartment in Lisbon and is having it updated while still in Los Angeles. (I met him when we were both in Portugal.)

As for real estate prices, there are two many factors to take into account. Will the British economy post-Brexit recover in 6 years and will they keep buying property there or will they be selling? (Most foreigners who buy Portuguese RE are Brits.) Will the world economy keep producing upper class people in order to buy expensive RE? Obviously, in general, RE prices have gone up over the years but who knows?

I don’t know any experts who would recommend buying RE as a 6 year investment. Stocks and funds are better. Don’t buy RE if you’re worried about its value in 6 years.