Unlocking the Iberian dream: Spain vs. Portugal

Real estate is still considered a good asset for long-term investments, and with Europe’s diverse property markets, the options seem limitless. Spain and Portugal, two of the continent’s most sought-after holiday destinations, stand out as attractive choices for property investments.

Spanish vs. Portuguese property

Both Spain and Portugal offer unique attractions for real estate investors. Spain boasts a rich cultural heritage, stunning beaches, and vibrant cities, while Portugal captivates with its picturesque landscapes, historic charm, and welcoming communities. Deciding between the two can be a challenging task, as each country presents its own set of opportunities but also its challenges, especially when it comes to rental licenses and changing visa programs. 

Recent regulations require property owners to obtain licenses for short-term rentals in both countries, which are not easy to come by, impacting the potential profitability of investments.

Spain’s golden visa programme, offering residency to foreign property investors, has fueled interest in the country’s property market in recent years. According to the law firm Del Canto Chambers, the foreign buyers’ market share increased to 20.2% in the third quarter of 2023, marking the highest level on record since 2015. However, after receiving rigorous scrutiny during the past few years, including from the European Parliament, this might not be the case for much longer and Spain may discontinue its golden visa programme in 2024.

On the other side of the Iberian Peninsula, Portugal has, until recently, also been a favourite among investors seeking a golden visa, providing residency through property investment. However, this changed in October 2023 when new legislation was passed, disqualifying investments under the real estate categories of the golden visa program, no longer allowing investors to invest in property or a real estate-related fund and use this to apply for a golden visa in Portugal.

Climate

Spanning diverse landscapes, Spain offers a range of climates to suit different preferences. The southern and eastern coastal areas as well as the Balearic islands enjoy Mediterranean weather with hot, dry summers and mild, wet winters. Moving inland, Spain’s central plateau experiences a continental climate with hot summers and cold winters. Northern Spain, including regions like Galicia and the Basque Country, has a maritime climate influenced by the Atlantic Ocean, resulting in cooler summers and milder winters compared to the rest of the country. 

Portugal’s climate also varies by region, with coastal regions experiencing a maritime climate characterised by mild, wet winters and relatively cool summers, especially on the Atlantic side. Inland areas boast Mediterranean weather similar to that of southern Spain, offering warm, sunny summers and relatively dry winters. 

Cost of living

The cost of living in Spain varies depending on the region, including holiday regions, with larger cities like Valencia and Palma generally having higher living expenses than smaller towns and rural areas. While the cost of housing in prime locations can be significant, Spain offers relatively affordable dining, transportation, and entertainment options, making it an attractive destination for holiday makers.

Portugal is known for its affordable cost of living compared to many other European countries. Cities like Lisbon and Porto offer a high quality of life at a fraction of the cost of other European capitals. Housing prices in Portugal have risen in recent years, particularly in popular tourist destinations, but remain relatively competitive compared to neighbouring countries. 

Transport infrastructure

The Spanish mainland boasts an extensive and efficient transport network, including high-speed trains, well-maintained highways, and an extensive bus system. Major cities are well-connected by rail, making it easy to travel between regions. In the Balearic islands, ferries and flights connect the islands to mainland Spain, providing convenient access for residents and tourists alike.

Portugal’s transport infrastructure is modern and reliable, with a network of highways, railways, and public transportation options serving major cities and regions. The country’s international airports in Lisbon and Porto offer connections to destinations worldwide. In cities like Lisbon and Porto, trams, buses, and metro systems offer convenient and affordable ways to navigate urban areas.

An innovative solution for holiday home buyers

For those torn between the charms and challenges of Spanish and Portuguese properties, or for those looking for a more accessible way to buy a holiday home in one or both of the countries, fractional ownership presents an innovative solution. Co-ownership allows individuals to pool their resources and collectively purchase a beautiful second home. This approach does not only minimise financial risks but also provides the flexibility to enjoy the best of both worlds. Furthermore, the advantages of shared ownership includes:

– Cost-effective investment: Co-ownership enables you to invest in premium properties at a fraction of the cost, making it a financially viable option for a broader range of investors.

– Cost aligned with usage: Co-ownership allows you to only purchase as much as you need, aligning both your initial outlay as well as the running costs with your actual usage. 

– Flexibility: With managed co-ownership, home owners can schedule their stays in the property, allow friends or family members to use the home, or rent it out.

– Shared responsibilities or fully managed: Maintenance, property management, and other responsibilities are shared among co-owners or, with managed co-ownership, fully managed by companies like Lazazu, removing the individual burden and ensuring the property is well-maintained.

In the debate over whether Spain or Portugal is the superior choice for real estate investment, co-ownership represents an easy entry into the market and perhaps even an opportunity to own a property in both countries. Get in touch with our international team to get matched to your dream Iberian holiday home. 

Discover more about Lazazu:

How Lazazu co-ownership works | Frequently asked questions about shared holiday homes | The benefits of fractional ownership | Browse Lazazu’s selection of second homes | The difference between timeshare and co-ownership