Portugal is famous for its tiled city views, white-sandy coastlines, and historical romance. However, it is not just the architecture, tourist places, and spectacular views rather Portugal is a European country with a rich culture its construction sector is massively expanding and there has been a boom in Construction within Portugal.
Companies Buying Real Estate for Construction Projects
The recent increase in the construction sector is because of the growing demand for more residential and construction projects within the country. As most people know Portugal has a lot of unpopulated land, so this has led several construction companies to take an interest in building and rehabilitating new places. There are a lot of foreigners who are taking keen interest in investing in real estate so their chances of getting a permanent residency can be increased more than ever.
Porto and Lisbon are Main Hub for Construction
Cities like Porto and Lisbon have seen a rise in construction projects, and it is believed that in the future these two cities will continue to boom. The increase in population and economic growth has caused a rise for the need of new buildings to be constructed, especially in the year 2024.
Portugal is a small country its total area is only 92,212 square kilometers. To put into perspective, it’s around 20,000 square kilometers larger than Greater London but smaller than the US state of Kentucky. This can be backed up by the report of the National Institute of Statistics (INE) that:
2% more housing approvals took place in 2023 compared with 2022
This further proves the future strength of the housing sector. The only downside to this surge in construction industry is the inflation of home prices since last year. One personal company data show that in 2023 the average price of a house in Portugal hit almost €1,200 per square metre which is 9.6% higher as compared with the beginning of last year. Portugal’s construction boom cuts across many sectors of the economy. The government is investing heavily in infrastructure – transport, electricity, public services. This can be coped with strengthening the country’s transport network and redesigning urban layouts to decentralize the big cities. The huge National Roads Plan 2030, for instance, envisages a total investment of €5 billion to strengthen the national road network. It also aims to generate greater than 50% green energy by 2030.
Sustainable Construction Projects
Sustainable wind and solar power projects have been designed to satisfy sustainable development goals and propel development in the country. The golden visa system is contributing major investments in the country too and this grants residence permits to non-EU investors of more than €500,000 for investment in real estate. The amount invested by foreigners in Portuguese real estate rose to €3.5 billion in 2023.
The major cities like Lisbon and Porto are at the forefront of the construction boom. The Algarve region is also best known for its tourism appeal and for this it is also witnessing significant construction activity. Algarve is involved in luxury residential and hospitality projects.
Construction Industry Still Faces Challenges
Although there is a significant surge in the construction industry in Portugal, but it still faces several challenges. The cost of the material is still rising and along with this shortage in labor is impacting project timelines and profitability. The government is actively working to address these issues through policy reforms and incentives aimed at attracting skilled labor and streamlining approval processes. It is no doubt that the challenges still remain, the future outlook for Portugal’s construction sector remains optimistic and promises a sustained growth and development in the coming years.
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