With the economic crisis in Europe still hitting Portugal hard, it’s a buyer’s market for real estate and a renter’s market for apartments—at least outside the university towns. Many Portuguese people will tell you that €750/$1,000 is a pretty common amount for locals to live on. Sure, several family members will generally pool resources in one home, but still, if you move here as a couple that can bring in $3,000 a month, you’re going to be considered very well-off by local standards.
Julie Dawn Fox had been teaching English as a second language for 12 years, mostly for the British Council. After living in Spain, Tanzania, and Venezuela, she was getting tired of the transient lifestyle and wanted to settle down somewhere in Europe. “I missed the boat on buying a house in the UK; had an opportunity when I was younger but passed on it to go traveling instead,” she says. “While I was gone, prices skyrocketed and there was no way I could afford it. I looked at Portugal and the prices were much more affordable. I knew I could buy a house there on my own. I got a job teaching, but then I met my husband (also English) there. We only pay a couple hundred euros a month for his place. The drawback of that is we need two cars. We’re about 35 kilometers from Coimbra city where we work. We spend €200-250 a month on petrol. It’s usually more than our mortgage”
Julie and her husband regularly put €1,200 a month (around $1,620) from their teachers’ salaries into a joint account and that covers all their expenses. “If you aren’t extravagant, you can live well on a decent wage. Occasionally there’s enough left over for eating out and a bit of travel. We could probably could do it on €1,000 a month if we had to.” They are living in a modest three-bedroom house, but the low mortgage cost definitely helps. “This house would probably be 700 – 800 pounds a month in the UK,” she estimates. “We wouldn’t be able to afford it.”
Gail Aguiar has plenty of places to compare with her new home in northern Portugal. She was born in the Philippines but moved as a toddler with her family to Canada. “I grew up in several regions of Canada, where she spent time in Saskatchewan, Winnipeg, Vancouver, Toronto, and Banff. In between there was time in Australia, the UK, and the semi-rural northeastern U.S. This is it, though,” she says. “I have no plans to move anywhere else unless my Portuguese husband suddenly decides he wants to try expat life for himself, in which case I would join him.”
Gail lives about 10 miles from the center of Porto and while her husband already owned a place, she says rental for a two-bedroom apartment like she’s in starts at around 400 euros per month ($540). In the center of Porto prices would be similar, but the apartment might be older and smaller.
Prices are similar in Lisbon, where a one-bedroom flat in a prime area can be found for under $600 a month and if you’re willing to expand your zone of possibilities, you could get more space or a lower price.
Buying a place is very reasonable by European standards throughout the country. “In Coimbra, for a reasonable apartment you would pay 150,000 to 200,000 euros for a nice two- or three-bedroom place. In rural areas, it’s easy to find a place that size for 100,000 euros or less,” says Julie. “There are lots of repossessions and bank sales going on right now. Banks sometimes offer 100 percent mortgages on these so you don’t need a big down payment, but restrictions are rather strict. When I was looking into it, they wanted an additional guarantor for the mortgage. They also wanted us to buy life insurance that would cover the amount in case something happened to us.”
Alicia and her husband paid cash for their home from a sale in England and had enough left over for a fixer-upper project on top. They live near the Silver Coast in Central Portugal, half an hour from the ocean and an hour from Lisbon and the airport. “We have a pool and an olive grove, and gorgeous views. We also bought an incredibly cheap village house in Castelo Branco which is a stunning area,” she says. “We get to experience real village life and the neighbors are very friendly. We are renovating the house and its slow going as we don’t live there now but we plan to rent it out for holidays.
Property prices are incredibly low,” she adds. “For the price of a tiny terrace or flat in, for example, The Midlands area of the UK you can get a lovely three-bedroom house with a garden near the coast or a two-bedroom flat a stop or two away from the center of Lisbon. We viewed a three-bedroom flat with a view of the sea for €35,000 just a ten-minute drive away from the city of Lisbon and only a 5 minute walk to the metro.
They don’t have rent or a mortgage since they own the house outright, but Alicia says, “You can get something decent from about €350 a month in Central Portugal and on the Silver Coast.” For their five-bedroom house near Lisbon they pay €890 per annum in property taxes. For the two-bedroom house in the countryside it’s only €100.
Foreigners can own real estate outright in Portugal, but closing costs can be high: figure on 7-8 percent.
Author Alicia Sunday grew up in the Leicestershire countryside in England, moved to London for fifteen years, then to Cambridgeshire for twelve years. “We were attracted to the warmer weather in Portugal and being able to lose the mortgage and buy something with the equity from the house yet have more space and land,” she says. “We also liked the fact we could still afford to be less than an hour away from a fabulous capital city. Since coming here we have also discovered that expats are being encouraged here by lower taxes via the non-habitual residency scheme.