Golden visas singe hasty investors

Unlike Hua, Rex Shen spent months researching home prices in Portugal before using up most of the money he saved working as a casino manager in Macao to buy two apartments in the center of Lisbon. He cut out middlemen and paid almost no commissions.

Shen now works as a real estate agent in the Portuguese capital selling properties to his fellow countrymen.

"A smart Chinese investor should do the necessary research before coming to Portugal," Shen said on Feb 25. "It is a free market and some real estate agents in Portugal are indeed selling properties at very high prices."

Demand from Chinese property buyers remains strong as China continues to allow a freer movement of funds in and out of the country. About 90 percent of bidders at a real estate auction of government-owned apartments in Lisbon last year were Chinese.

The Chinese came "at a difficult time for Portugal, when many didn't believe that the country could face and overcome the crisis", Antonio Costa, the mayor of Lisbon and leader of Portugal's Socialist Party, said on Feb 19. They made a "big contribution to Portugal's ability to be in the situation it's in today, very different from where we were four years ago".

Foreigners accounted for 90 percent of the 730 million euros invested in Portuguese real estate last year, almost three times more than in 2013, according to data compiled by Aguirre Newman SA, a real estate consulting company in Lisbon. The Portuguese government expects economic growth to accelerate to 1.5 percent this year from an estimated 1 percent last year, bolstered by exports and investment.

That is why Portugal should treat foreign investors well, said Paulo Silva, head of Aguirre Newman in Portugal. Some Chinese investors have trouble determining if they are overpaying, he said.

"It's hard to know if a house that costs 500,000 euros in Portugal is expensive when two parking spots in Hong Kong can easily fetch more than that," said Silva. "That makes it important for Portugal to treat all foreign investors fairly or they will just move somewhere else."