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Sep 17, 2014

Moderate to good yields on Lisbon apartments, ranging up to 6.41%


Last Updated: Sep. 17, 2014
ALGARVE - Apartments COST () YIELD (p.a.) PRICE/SQ.M. ()
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
60 sq. m. 105,660 334 3.79% 1,761 5.56
90 sq. m. 126,630 393 3.73% 1,407 4.37
120 sq. m. 192,480 565 3.52% 1,604 4.71
ALGARVE - Villas
150 sq. m. 309,900 713 2.76% 2,066 4.75
350 sq. m. 791,350 1,635 2.48% 2,261 4.67
LISBOA - Apartments
60 sq. m. 103,200 551 6.41% 1,720 9.19
90 sq. m. 156,150 737 5.66% 1,735 8.19
120 sq. m. 212,520 1,022 5.77% 1,771 8.52
200 sq. m. 484,200 1,994 4.94% 2,421 9.97
LISBOA - Villas
150 sq. m. 361,650 1,457 4.83% 2,411 9.71
300 sq. m. 634,200 2,547 4.82% 2,114 8.49
650 sq. m. 1,933,750 4,914 3.05% 2,975 7.56
Districts researched:
The Algarve region includes the municipalities of Albufeira, Faro, Lagoa,
and the towns of Almancil, Vilamoura and Vila Real de Santo Antonio.
Lisboa region include the districts of Lisboa, Cascais and Oeiras.
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

A 150- sq. m. villa or house in Lisboa costs around EUR 2,400 per sq. m and in the Algarve costs around EUR 2,060 per sq. m. Apartments are also more expensive in the capital region. In Lisboa, a typical 120 sq. m. apartment in an elite area changes hands at around EUR 1,800 per sq. m. while in Algarve, a 120 sq. m. apartment costs on average EUR 1,600 per sq. m.

Gross rental yields from villas in the Algarve, i.e., the gross return on investment if fully rented, are poor, at around 2.5% only. Algarve apartments return better rental yields, ranging from 3.52% to 3.79%. Rents from apartments in the Algarve range from around EUR 4 to EUR 5.5 per sq. m. per month, so you can expect monthly rental income of about EUR 560 from a 120 sq. m. apartment. Villas in the Algarve rent for around EUR 5 per sq. m. per month, so you can expect monthly rental income of about EUR 1,635 from a 350 sq. m. villa.

Lisboa apartments obtain much better yields, ranging from 4.94% to 6.41%. In Lisboa, rents from apartments range from about EUR 8 to EUR 10 per sq. m. per month, so that a 120 sq. m. apartment can be rented for about EUR 1,000 per month. Villas in Lisboa rent out for around EUR 7.50 to EUR 10 per sq. m. per month, and a 300 sq. m villa can be rented for around EUR 2,100 per month.

Smaller apartments tend to be most profitable. A 60 sq. m. apartment in Lisboa returns around 6.41% rental yields, whereas a 200 sq. m. apartment returns only 4.94% rental yields. Moderate rental yields are also observed from villas in Lisboa, and again the rule is the larger the villa, the lower the yield.






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