The Climate in Portugal: An Asset for Real Estate Investment

11 July 2024 • 4 min read

Why is the Climate in Portugal an Advantage for Real Estate Investment?

The climate is a determining factor in the real estate investment decision-making process. After all, a pleasant climate offers an enjoyable living environment and is ideal for creating memories with loved ones. In the current economic context, investing in Portugal, particularly in regions with mild and sunny climates, offers a safe haven and a potential legacy to pass on to future generations.

The Advantages of a Favorable Climate for Real Estate Investment in Portugal

Portugal enjoys a Mediterranean and subtropical climate, characterized by hot, dry summers and mild winters. This pleasant, year-round climate offers numerous advantages when it comes to investing in real estate.
Warmer regions draw in a large number of buyers, both national and international, seeking a great living environment, a mild climate, and sunshine throughout the year.
A mild climate allows for full enjoyment of all outdoor spaces and promotes activities in nature. Properties with gardens, terraces, or pools are therefore highly sought after, increasing demand and property prices in these regions.
The climate is also a determining factor when choosing a vacation destination. Portuguese regions with a pleasant climate attract many tourists each year, generating high demand for seasonal rentals and offering attractive rental yield potential for real estate investors.

Regions Offering a Warm Climate

Portugal is full of regions known for their pleasant climates, both on the coast and inland.
They include:

• The Algarve: Located in southern Portugal, this coastal region benefits from a Mediterranean climate with hot, dry summers (29°C) and mild winters (16°C), making it a popular destination all year round. Ferragudo is an adorable fishing village and a must-see spot.

• Lisbon and its surrounding region: The Portuguese capital also offers a Mediterranean climate, with manageable temperatures throughout the year (between 15°C and 29°C). Highly appreciated for its lifestyle offering, it is the best place to enjoy a pastéis de nata whatever the season.

• The Alentejo region: Located south of Lisbon, this inland region offers a temperate Mediterranean climate with hot, dry summers (34°C) and mild winters (15°C), as well as beautiful landscapes. The seaside can be enjoyed from spring through fall.

• The Setúbal region: Close to Lisbon, this coastal region boasts a Mediterranean climate with temperatures ranging from 23°C to 11°C. It is known for its beautiful beaches and preserved natural park, which promises fantastic family outings.

• The Madeira Islands: This region offers a subtropical climate with mild temperatures all year round (between 19°C and 26°C). Its mild climate makes it perfect to visit in any season to admire its breathtaking natural landscapes.

• The Azores: The climate here is mild and subtropical, influenced by the Atlantic Ocean. In the fall or the spring, you can experience all four seasons in one day, shifting from rain to clear blue skies. In the summer, temperatures hover around 25°C and can drop to 14°C in winter.

Lifestyle and Real Estate Demand

Regions with a mild climate in Portugal experience high demand for residential properties, both from national and international buyers. This demand is closely linked to the lifestyle offered by these regions, where it is possible to enjoy outdoor activities and a great living environment to the full.

Tourism and Rental Market

The tourist influx to Portuguese regions with a warm climate drives high demand for seasonal rentals. Real estate investors can therefore take advantage of this rental income potential by offering properties that meet tourists’ expectations, such as apartments with sea views or villas with pools.

Real Estate Investment Prospects in Regions with a Favorable Climate

Current trends and forecasts for real estate investment in Portugal are promising thanks to its pleasant year-round climate. Investors interested in luxury real estate programs in these regions can benefit from several advantages, including:

  • A secure investment in an uncertain economic context, where real estate offers a safe haven and a legacy to pass down to future generations.
    Sustained rental demand, generated by high tourist numbers and those seeking a pleasant living environment. According to the Francisco Manuel dos Santos Foundation, the foreign resident population has doubled in ten years, contributing to rental demand (source: The Portugal News).
  • A potential resale value increase, thanks to the growing attractiveness of these regions. According to the French housing price index, housing prices have increased to a current index of 211.27 compared to the previous 208.48.
  • The southern European climate is an undeniable asset for real estate investment in Portugal. Regions offering a favorable climate, such as the Algarve, Lisbon, Alentejo, Setúbal, and the Madeira and Azores islands, attract large numbers of buyers and renters, both national and international. Investing in real estate in these regions means that you can take full advantage pf rental income potential, resale value increases, and an overall secure investment. Portugal is therefore a key destination for real estate investors seeking warm climates and a way to build their assets.

Draw on the expertise of our luxury real estate investment advisors in Portugal, who can make your projects a reality and provide bespoke recommendations to meet even the highest standards.