Rich Chinese among foreigners snapping up homes in Portugal
Graft scandal failsto deter rich Chinesein search of bargain homes and residency
Portugal's property market continues to expand at double digit rates thanks to foreign buyers, including China's new rich, despite a graft scandal over visas used to lure in rich non-Europeans.
More than one in five residences sold in Portugal last year was bought by a foreigner, according to data by the Portuguese Real Estate Agents Association.
Britons were in top place among the 23,000 buyers, followed by Chinese and French.
"The property market grew by between 9 and 15 per cent in 2014," said the head of the association, Luis Lima. "If it hadn't been for the Banco Espirito Santo debacle and the golden visas scandal it would have been 25 per cent."
The collapse of BES amid suspicions of multinational accounting fraud and the visa scandal that saw senior officials resign raised concerns about the integrity of the market. But Portugal's warm climate, low property prices and tax breaks for European retirees continued to pull in many buyers.
"We've seen a small drop in demand from the Chinese since the visa scandal in November, but the number of French moving into Portugal has exploded," said Miguel Poisson, director of the ERA real estate agency network in Portugal.
Portugal has now dethroned Morocco as the top foreign destination for French retirees.
Property prices slumped by a third after Portugal was tripped up in the euro-zone debt crisis and needed to be bailed out by the EU and IMF.
Chinese, like the French, have a taste for homes with pools in the coastal resort town of Cascais, a short drive from the capital Lisbon, and seaside villas in the south. But their tastes diverge when it comes to Lisbon: the French opt for renovated apartments, while Chinese choose new flats in modern buildings.
Portugal has been trying to lure rich Chinese by offering them residence permits that allow them to travel freely throughout most of Europe. Foreign investors buying property worth €500,000 (HK$4.4m) or more and keeping it for at least five years receive residency rights in Portugal.
The residence permits, or "golden visas", allow holders to travel without visas throughout the 26 European nations in the borderless Schengen zone.