A Golden Record

The number of Golden Visas granted by Portugal's SEF (Serviço de Estrangeiros e Fronteiras) hit a new record in May with 270 Golden Visas granted in just one month, totalling €146m of investment. This new record comes four months after changes were announced to Portugal's extremely popular residency programme, which has so far attracted €5.29bn of investment.

May's figures are more than all of 2020's previous months combined and represent a 409% increase from the number of Golden Visas granted in April (53). Most (85%) of the permits granted in May were for investments of €500,000 in real estate, however, the fund option, which offers international investors the same benefits of the programme but through a fund investment of at least €350,000, saw a three-fold increase.

"The government made a big statement in January with these changes and the market has reacted," comments David Moura-George, Director of Portugal at Athena Advisers. "In January, those wanting to invest in coastal areas like Lisbon and Porto were given an 11-month window of opportunity and we're now seeing the impact. Even though the feeling in the market is that the government will at least pause or cancel the forthcoming changes due to COVID-19, for now, the window of opportunity remains the same."

Investor persistence during COVID-19, technology underpins market

"What is more remarkable is how persistent and resilient investors have been in light of COVID-19," adds Moura-George. "Almost all Golden Visa investors are happy to proceed on a remote basis, supported by virtual meetings and virtual property viewings using video calls. Technology is underpinning the market at the moment."

Golden Visas granted in 2020

Why the big spike?

At the beginning of the year, the Portuguese government announced they were bringing in regulations to limit Golden Visa applications, meaning that all coastal regions, including Lisbon, Porto and the Algarve, would no longer be eligible, therefore driving investment further inland. The new regulations, which were set to come into action at the end of 2020, have triggered a wave of urgency amid foreign investors trying to secure a property purchase and apply for the programme before the window closes.

While many major cities are expecting house prices to decline during and following COVID-19, Lisbon is one of four world cities where prices have been forecasted to rise this year (Knight Frank statistics), furthering encouraging buyers to invest now.

Fund investments see triple growth

The investment fund option of Portugal's Golden Visa programme (also known as the ARI, Autorização de Residência para Investimento), is also seeing significant growth in interest. In 2020 the number of Golden Visas granted under this format has tripled and is already double the total amount recorded for 2019.
"As prices continue to rise in Lisbon, some investors who want to access the Golden Visa programme at the €500,000 level are being priced out of central city districts like Baixa and Chiado," adds Moura-George. "The minimum investment amount for the fund route is €350,000 so if you invest in a fund that focuses on real estate investment in central Lisbon, then this can be a clever way of accessing the prime central market, but at the lower level of €350,000 and still get the benefits of the ARI."

Will the new Golden Visa regulations come into place at the end of this year?

Since its establishment in 2012, almost €5.3bn has been invested into Portugal with the via the Golden Visa programme. There have been 8,736 investors and 14,396 family members have been 'added', bringing the total number of people who have benefitted from the programme to 23,132.

Portugal's Socialist Party leader António Costa, who was re-elected into government in 2019, stated earlier this year that Golden Visa applications will no longer be available to those investing in coastal areas. This change aims to curb real estate investment in areas like Lisbon and Porto and instead channel investment to where it's most needed: further inland in the interior and autonomous regions (Azores & Madeira). The new restrictions were meant to come into place at the end of 2020. However, following a dip in the national economy due to COVID-19 and considering the strength of Portugal Golden Visa as an investment driver, it is possible that the start date will be pushed back.

Currently, foreigners can apply for a Golden Visa by investing €500,000 in real estate and can acquire European citizenship in as little as five years. The terms and benefits of the Golden Visa programme will likely remain the same, but this is yet to be confirmed.