Housing: Chinese investment in Lisbon drops by almost half in 2023

The house payment will start to fall this month for loans with a three- and six-month Euribor rate, but in the 12-month period it will still rise. Chinese investment fell by half last year, with only the Americans and the British buying more houses in Lisbon.

Euribor rates have been falling since the end of last year, but in March they reversed their downward trajectory and rose slightly.

Despite this, they remain below the European Central Bank’s reference rates and, this month, the installment will be lighter, if the home loan contract is reviewed in April.

Examples

For a mortgage loan on which you still owe 150,000 euros, indexed to the six-month Euribor with a term of 30 years and a spread (the bank’s profit margin) of 1%, you will pay 795 euros this month, 12 euros less than paid at the last review, in October.

In the case of three-month Euribor, with the same conditions, the installment drops to 798 euros, one euro less compared to the January review.

But, if you have a 12-month rate, you will pay 779 euros, six euros more compared to April last year, if the contract is reviewed this month.

Those with a fixed rate are immune to these reductions. Recent years have been marked by an increase in the cost of living and, according to the National Statistics Institute, the average house payment soared by almost 35% last year.

Only now are families and companies beginning to feel the relief from bank payments with the expectation of an interest rate cut in June.

Foreign investment

What also decreased was Chinese investment in real estate in the capital. Last year alone, home purchases by Chinese citizens fell by almost half. Currently, it represents only 6% of all foreign investment in the purchase of real estate, taking into account that it was already worth 20%.

It is necessary to go back more than 10 years, to the time of the Troika, when companies and national real estate were the target of strong Chinese investment, a factor that appears to be changing.

The end of golden visas could be one of the reasons for this decline, which caused a housing crisis in Portugal and across Europe.

Data from confidential real estate, consulted by Diário de Notícias, reveals that in 2023 more than 900 million euros of foreign capital was used to buy houses in Lisbon.

The Americans and the British were the only ones who reinforced investment in the country. The French, Germans and Brazilians also bought houses here, but much less than two years ago.