- An increase in demand from Hongkongers has prompted property agents from Lisbon to travel to the troubled city to pitch to potential buyers
- About half of the buyers from Hong Kong are aiming to obtain permanent residency under Lisbon's golden visa programme, according to property agents
Hong Kong is tipped to become one of the top sources of foreign investment in Portuguese property as residents seek a European haven from the violent protests that have consistently reduced their city to something resembling a war zone.
An increase in demand from Hongkongers has prompted property agents from Lisbon, the Portuguese capital, to travel to the troubled city to meet clients and make a sales pitch to them.
About half of the buyers from Hong Kong are aiming to obtain permanent residency under Lisbon's golden visa programme, according to property agents.
"I believe the current protests have created a strong interest in property markets in Europe," said Luiz Felipe Maia, director at Maia International, a property agent based in Lisbon.
"I also work with properties in Spain, France and London, however the focus for foreign investors is Portugal where yields for rental run between 4 and 7 per cent."
Castelhana Real Estate held three days of seminars and met with 90 potential clients in September, while Maia International will be holding a six-day meeting with clients from the end of this month.
"We expect Hong Kong to rank among the top five sources of foreign capital in Portuguese real estate," said Patricia Climaco, a partner at Castelhana.
Maia said Hongkongers would be in the "top seven" overseas investors in the market. Portugal has been a prime target of mainland Chinese investors for some years now.
"I don't think they will beat the Brazilians, French, English and mainland Chinese buyers" he said.
In its sales pitch in Hong Kong recently, Castelhana and its local partner Habitat Property presented 10 projects and were expecting to close deals on 15 to 20 units.
Hong Kong's desperate homeowners slash prices by 20 per cent
Maia said he would be coming to Hong Kong owing to a "significant increase in the leads" coming from the city.
"I have received over 25 inquiries in the last two months and had to extend my agenda from two to six days in Hong Kong to accommodate all meetings and presentations. I will possibly extend for longer if necessary," he said.
Hong Kong has been mired in its worst political crisis in decades, with frequent clashes between anti-government protesters and police denting confidence on the city's prospects and stability. Many Hongkongers have been looking for a backup plan that will allow them to move overseas in a hurry.
Portugal, with its fast-track scheme to get residency with a property purchase of Euro350,000 (US$384,000), is definitely on their radar.
Clock ticking on luxury store closures if protests continue, LVMH executive says
Maia's first sale to a Hong Kong-based buyer was in early 2018. Since then he has had 11 deals with Hongkongers who bought property worth between Euro380,000 and Euro3.1 million. Houses above Euro1 million were usually bought by people intending to have a holiday home in Portugal, he said.
"I expect to achieve five to 10 sales in Hong Kong this time with an average price of Euro600,000 per unit," Maia said.
As of the end of August, Lisbon's golden visa programme had granted about 8,000 residence permits, with a little over half of them to Chinese nationals, followed by Brazilians.
The Portuguese economy has grown 2.1 per cent in 2019, and the unemployment rate has dropped 2 percentage points to a 14-year low of 7 per cent, according to a report by property consultancy CBRE.
Its tax-friendly regime is also providing support to its property market and wider economy.
"In the last two years, Portugal attracted over 20,000 wealthy people from France as we don't have inheritance and wealth tax," Climaco said.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.