Lisbon, London or Los Angeles – after Covid-19, where are luxury property investors looking to buy?
Want to be Madonna’s neighbour? Join her and head to the Portuguese capital as analysts predict a luxury real estate boom after the virus has passed
If you were a betting person, where in the world would you invest as the most promising, post-Covid-19 property hotspot?
According to Knight Frank's analysis of prime residential markets in 20 cities, Lisbon in Portugal – Madonna’s adopted hometown – should top the list.
Portugal has been relatively successful in pushing back against the pandemic, despite sharing a border with hard-hit Spain, and having one of Europe's highest populations of people over the age of 80.
In tandem with a swift lockdown response, the country's relative isolation and lower density are credited with helping to keep Portugal's infection rate down. This marries well with Knight Frank's prediction that people will want more space around them once this is all over – if not in their primary residence, then at least in their second homes.
While prices of prime properties in Lisbon are forecast to drop this year, Kate Everett-Allen, head of international residential research at Knight Frank, expects an uptick in 2021.
She puts this down to two key initiatives: Portugal's non-habitual residents (NHR) system, which offers tax advantages to foreigners, and its golden visa scheme that has “gone down particularly well with Chinese, Brazilian and Turkish buyers”. “It also comes down to fundamentals,” Everett-Allen says. “In terms of housing markets, Lisbon's is still relatively affordable compared to other European cities, and the cost of living is reasonable.
“There's a lot of investment taking place, including a new airport. Portugal's got a lot going for it, and we're seeing quite a level of inquiry for the Lisbon market at the moment.”
Knight Frank forecasts growth above 5 per cent for Lisbon's prime property in 2021, and believes that other European markets such as Berlin, Germany and Madrid, Spain, should also rebound well next year.
The other big winner for 2021 is expected to be London. The prime market in the UK capital has had its best start to the year since 2016, and this is expected to continue.