'One of Europe’s most in-demand cities': why the prestige property market is booming in Lisbon

“Lisbon, Portugal’s light-filled capital, is one of Europe’s most in-demand cities,” declared the international real-estate giant Knight Frank recently.

As evidence, the agency points to tourist delights such as riding the yellow trams up and down steep hills in between sampling cinnamon-laced pastries.

“Investors love it for its solid investment and development prospects, rated by financial services firm PwC as the best of any European city this year,” the agency’s International property digest, Insight into prime Lisbon, reports. “And residents love it for its delightful mix of history, gastronomy, traditional style and contemporary design.”

The historic neighbourhood of Alfama is home to a captivating medley of Moorish and medieval architecture, where prestige homes have been created inside the shells of heritage buildings.

In a narrow street, a glamorous four-bedroom duplex in a 16th-century building offers stunning views over the Tagus River on one side and the square of Sao Pedro Tower on the other.

Timber beams and tin-glazed ceramic tiles provide a rustic backdrop for sumptuous contemporary finishes.

Christie’s International Real Estate affiliate Porta da Frenta is quoting a guide of €3.85 million (about $6.31 million).

Current market

It’s boom time. Portuguese house prices have risen about 25 per cent since 2013. In some of Lisbon’s most sought-after inner-city areas, that figure skyrockets to 60 per cent.

A shortage of rental stock is driving up yields to 6 per cent in the city centre, Knight Frank reports.

With an influx of corporate and tourist activity, as well as future airport and metro projects, the good times are predicted to keep rolling.

Can Australians buy in?

Rafael Ascenso, an agent at Porta Da Frente, says Golden Visas are available for non-EU buyers. “Golden Visa is a very simple and flexible program, assuming a minimum investment of €500,000 [about $814,000],” he says.

A municipal tax on property transactions, stamp duty and deed costs apply. “There is a single real-estate central register, which can be consulted online, ensuring it is quite easy and safe to buy a property.”

What you can buy for…

$27.87 million

Rambling gardens are a standout feature of a palatial property on more than two hectares in Cascais, a seaside resort town just west of Lisbon. 

$24.5 million

Be king of your own castle at a turreted palace in the upmarket suburb of Principe Real. The terracotta-hued pile has received a high-end reno.

$4.59 million

Mid-century style meets contemporary comfort in a Cassiano Branco-designed villa in central Lisbon. The five-bedroom property includes a pool and lift.