the majority of real estate purchases in Portugal are done with credit. moreover, each property itself can be used as a collateral to get more credit - at least 75% of the property's value. so not only you can purchase the property, earn a yield via rents, but also get a credit/loan for 75% of value of the property in Portugal, ≈90% of all credit/loans against real estate, go into investing into more real estate. so each collateraized property, can contribute ≈2x of its value as buying pressure for the real estate market as a whole (1x when the property is first purchased, and 0.75x-1x when the property is used as collateral to get a loan against it) so effectively real estate itself is driving real estate prices up. banks happily finance real estate acquisitions, and lend against real estate collateral. then, most of that credit goes into purchasing more real estate, thus pushing the prices up so the main drivers behind increasing real estate prices in Portugal are: the real estate itself, i.e. the property itself funding rate/cost of credit (highly influenced by ECB policy rates) low relative transaction volume/market cap, making it easier to move the median the first two points are generally universal across the globe. i've previously written an article about what makes real estate such a special asset from the point of view of financing. you can read it here: https://illya.sh/threads/@1757632740-1.html the relatively low total transactional volume, which has increased almost x3 in the past decade - makes it "easier" for buying pressure to push the housing prices up of course, other factors contribute as well. Portugal is highly demanded area for cultural and geographical reasons - i.e. locals are welcoming and Portugal has a huge coastal area. there is also high inflation, regulatory challenges and supply chain limitations the bottom line is that real estate purchase and rent prices in Portugal will continue to increase over medium-long term
portugal golden visa real estate investments are less than 3% of total housing transactions portuguese real estate market volume is ≈30B€/year, golden visa purchases accounted for ≈556M€/year 3% of total volume of the housing market is unlikely to be the primary driver of the national median prices increase so next time someone tells you that one of the main drivers behind increasing Portuguese real estate prices are golden visa investments - their argument is likely to lack substance
