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Refurbished Buildings • Government want urban renewal • 4,500 buildings in the city require renovation • Old rental contracts fixed for 50 years • Landlords could not increase the rents • Buildings became run down • Last year laws changed for old rental contracts • It is now possible to increase rents provided that the landlord renovates the building
Renovation of City Buildings • Most buildings are 100 years old • Any tenant living in these buildings are a minimum of 70 years old • Example: • Old rent can be approx €25 for an apartment of 170m2 • Value of a new apartment 170m2 = €3,000m2 x 170 = €510,000 • The legal municipal value on rental is 4% of price - €20,400 per year or €1,700 per month • From 4,500 buildings: 300 belong to council and 350 are currently awaiting planning approval to reconstruct in council.
What is happening in the market now? • Buildings are coming onto the market for sale. • Landlords are selling to investors and developers from Portugal, Spain, Italy and France are buying up. • Investors are buying blocks and once planning permission is through putting it back on the market at a profit. • Other investors go through with construction and sell apartments to the local market. • Prices have risen approx 20% within the last year in this sector • Locals are buying up these new built or renovated apartments • Portuguese have one of the highest rates of owner occupiers in Europe • Population of Lisbon is 4 million, only 500,000 live in the City now • There is enough accommodation in Lisbon to house 2 million people • New International Airport under construction in Lisbon. • Due to fixed rents no money was being invested in maintenance of the buildings and the standards dropped so residents moved out of the City • New modern apartments are in high demand in Lisbon City • Trends are changing and Portuguese are moving back into the City from suburbs as renewal is taking place • There is not enough supply to meet the demand • At the moment the price of property in Lisbon is only 1/3 of the average price of property in all European capital cities • The real estate market in Portugal has been increasing steadily for the last 50 year (currently 5-8% per year) • This is the beginning of an excellent investment opportunity This is a very well located building in the centre of Baxia. A total of 10 units are in the building 8 residential of which 1 is occupied and 2 commercial units both of which are occupied.
