The snaking queues of tourists outside Porto’s 19th century Livraria Lello bookstore are not people seeking a good read.
They’re tourists wanting to glimpse the second floor café where JK Rowling wrote Harry Potter and the Philosopher’s Stone while raising her daughter and teaching English in the City.
Potter fans believe the shop’s spiral art nouveau staircase and beautifully carved bookcases inspired Rowling’s fictional Hogwarts School of Witchcraft and Wizardry.
It's a new brand of tourism magic for Portugal's second-biggest city, which in the past relied on its beautiful scenery to attract visitors. It is also famous for its port producing – a happy consequence of Portuguese wine producers adding brandy to wine bound for England to stop it fermenting.
Now overseas buyers are starting to fall under Porto's spell as a holiday destination, too, boosted by a huge volume of low-cost flights.
Those wanting winter sun will always head to the Algarve, but Porto is a city that is full of charm, with its Unesco-protected medieval core and beautiful Atlantic beaches within a 15-minute drive. Head east and you are in the magical Douro Valley, where rustic quintas sit among terraces of vines that tumble down to the Douro River.
British tourists comprised just six per cent of the city’s fast-growing visitor numbers in the six months to June, according to Portugal’s tourist office. But Predibisa, one of the city’s largest estate agents, says Brits (along with Brazilians) are the second-largest buyer group after locals.
Many British buyers are looking to move to the city permanently, attracted by Portugal’s “non-habitual resident” scheme, which exempts foreigners that spend more than half the year in Portugal from paying tax on foreign-sourced income. The majority are tempted by financial opportunities from Porto’s strong rental market, says estate agent Gonçalo Abilheira.
“Porto mainly attracts overseas buyers seeking properties with strong holiday rental potential in its historic centre, in areas such as Praca de Ribeira and Aliados,” adds Fine & Country’s Charles Roberts. “It’s behind the curve with the short holiday lets market, but if you are clever, you can buy in Porto for half the price of Lisbon, stick it on Airbnb and get almost the same nightly rate, so a much better yield.”
The British buyers we see in Lisbon and Porto are typically aged 50-plus and specifically say, ‘I don’t want a golf ghetto.’ They want monuments and museums, great restaurants and culture.
According to Confidencial Imobiliario, rental yields in central Porto for properties on short-term lets are 13.2 per cent, before taxes or costs (management, maintenance etc). In Lisbon, Portugal’s capital, equivalent yield is 9.9 per cent.
The improved yields are because Porto’s property market is markedly cheaper than Lisbon’s, despite comparable nightly rental rates. Fine & Country estimates that homes in downtown Porto currently sell for around €3,000 per sq m today; comparable Lisbon properties go for roughly €5,000 per sq m.
The most popular spot for UK buyers is the downtown area, including the city’s historical centre, which, spanning the Luiz I Bridge and the Monastery of Serra do Pilar, is protected as a UNESCO world heritage site.
The country has also benefited from the security concerns and drop in visitor numbers in Tunisia, Turkey and Egypt, Portugal’s main rivals for summer vacations.
Weekend visitors are preferring Porto over other European cities for the same reasons, says Richard Bowden, of the Michelin-starred Yeatman Hotel, which is currently expanding from 83 to 109 rooms as well as building a new World of Wine attraction that will include a museum and art gallery.
The growth of European budget airline flights has been crucial, Bowden adds.
Such is the tourist boom that the mayor of Porto, Rui Moreira, wants to impose a €1 a night tourist tax, in order to avoid tourism taking on proportions seen in Barcelona, or indeed in parts of Lisbon, such as Mouraria, “which drives out citizens”.
Lisbon already has a similar tax on overnight stays in tourist accommodation in the city.
The buy-to-let market in Porto could be further boosted by the end of November, when the European Commission will choose where to move the European Medicines Agency, which is currently based in London, in time for the UK’s exit from the European Union.
Porto is among the 19 cities that are bidding for it. And if they got it, they’d be no prizes for guessing what drink they’d toast that success with.
See visitportoandnorth.travel for more information.
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