However, to answer the question as to whether the Golden Visa program is actually responsible for the rising property prices, it is imperative to analyze the facts and explore the potential implications of this decision on international investor sentiment toward Portugal. In doing so, we can evaluate the long-term effects of this move on Portugal's economy and its standing in the global investment community.

Taking Account of Hard Data Rather Than False Blame

As per the latest statistics, the contribution of foreign investors towards real estate transactions in Portugal has been minimal. In the first half of 2022, international investors accounted for only 3% of all real estate transactions and Golden Visa applicants made up an even smaller percentage, contributing to just 0.6% of all transactions during the same period.

The total transaction value through the Golden Visa program in 2022 stood at €534,626,804.91, a mere 1.63% of the overall transaction value of €32.7 billion. These numbers clearly indicate that international investors, particularly those participating in the Golden Visa program, do not hold a significant role in the Portuguese real estate market.

Therefore, it would be unfair to attribute the rising property prices to the Golden Visa program, as it constitutes only a small fraction of the overall transactions. Other factors, such as domestic demand, supply chain constraints, and economic growth are also likely to have contributed to the escalating prices.The data provided in the table below supports this view without leaving any room for questions.

Credits: Supplied Image; Author: Client;

The changes that took effect in early 2022 on the Golden Visa program had limited the Golden Visa investors to purchasing only commercial real estate properties. The above data obviously suggests that there’s no significant correlation between the rising housing prices and the foreign purchases made through the Golden Visa program. To read more on the statistical findings, check out this article.

Credits: Supplied Image; Author: Client;

Credits: Supplied Image; Author: Client;

Discouraging the Investors with Such a False Charge on the Program

Blaming foreign investors for Portugal's escalating property prices, as the government did by ending the Golden Visa program, is misguided. The government must reconsider before taking any action that could harm international investor confidence. It is essential to identify the actual causes of the problem and implement effective policies to address them.

Ending the Golden Visa program, a highly profitable and thriving initiative, may lead to an unfavorable impression among international investors. This move could erode their faith in Portugal as a desirable investment destination, and ultimately lead to a decrease in foreign investment. As a result, Portugal may miss out on the numerous advantages of foreign investment, including job creation, economic expansion, and higher tax revenues.

A Call to Follow a Data-Driven Approach

The Portuguese government should heed the public and reputable constitutional lawyers' reactions to its decision and adopt an evidence-based approach when formulating policies. By scrutinizing the available data and comprehending the actual factors behind the real estate market, the government can make well-informed decisions that benefit both Portugal and its foreign investors.

The cancellation of the Golden Visa program is grounded on a fallacious premise that international investors are primarily responsible for the country's escalating real estate prices.

However, statistics demonstrate that these investors make up only a minuscule portion of the overall market. The government's decision to terminate the program poses a significant risk to Portugal's international investor trust. Therefore, we urge the government to reexamine its resolution and assess the facts before taking any further steps.

Get Properties is a bespoke real estate advisory firm. Since 2014, we help our clients make property investments that meet their lifestyle expectations in various geographies. We offer professional advisory services for property selection and acquisition, management, and rental services.

by Charles Taylor Harris, Executive Director at Get Golden Visa