These self-styled “Queen of pop” Madonna is just one of many celebrities to show interest in Lisbon property. She has posted an array of pictures on her Instagram account showing her family walking down the Lisbon streets already integrating themselves with the local culture and a Benfica T-shirt highly visible. Joking aside, there is growing concern in Lisbon because property prices have increased by 35% between 2012 and 2016 which is now a major problem for locals.
It is believed that Madonna visited a hilltop palace which belonged to Antonio Champalimaud who was hailed by many as Portugal richest person when he died in 2004. Interestingly it was Sotheby’s who confirmed that Madonna had visited the hilltop palace which offers some beautiful views over the city. Whether Madonna has will make an offer for the palace remains to be seen but she is certainly interested in acquiring a Lisbon property.
When celebrities such as Madonna show interest in Lisbon property this is something of a double-edged sword for the local public. On one hand it does give the area a greater profile within the media but on the other it does attract more celebrities and investors with prices having already dramatically increased since 2012. If we look at the cost per square metre it has now increased to €2318 which as we mentioned above is a 35% increase on 2012. Indeed this is the highest level since 2007 when the US economy crashed dragging the global economy down with it.
Other celebrities drawn to Lisbon
Italian actress Monica Bellucci, French fashion designer Christian Louboutin and former Manchester United favourite Eric Cantona are just three of the latest celebrities to acquire property in Lisbon. While some may compare Lisbon to places such as San Francisco, with a similar landscape, in reality it is the tax breaks offered to overseas investors which have turned the market.
Lisbon was empty in 2011
While it is a little dramatic to suggest that Lisbon was empty in 2011, it was an area which was literally on its knees with high unemployment and an economy which was struggling. In 2012 the government decided to offer resident permits to non-Europeans in exchange for the acquisition of real estate worth more than €500,000. Spain used a similar method to shore up its own property market in the short term to similar levels of success.
While government incentives have attracted a wave of overseas investors it is Chinese homebuyers who are again grabbing the headlines. Over the last few years we have seen a significant increase in Chinese investors switching from the domestic market to places such as the UK, Portugal, Canada and many other areas of the world. Even though the Chinese government has tried to reduce the outflow of funds to overseas real estate markets it struggling to make any real impact.
It seems almost inevitable that Madonna will acquire a Lisbon property as she has been looking at many in the area and seems to have bought into the culture. While some will criticise the Portuguese government for a variety of incentives offered to overseas investors, in reality this helped to stabilise the Portuguese real estate market in what were troubled times. It seems that the Lisbon property market is being invaded by the Americans, Italians, Chinese and French.