The government of Portugal announced that it is closely monitoring the prices of real estate and tightening its control over the issuance of residential permits to ensure that foreign investors continue to buy property through its golden visa program.

Portugal's golden-visa program, which was started in 2012, offers investors the chance to live in Portugal for only at least 500,000 Euros or US$559,000 of property investments.

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The program has resulted in more than one billion Euros in investments, mostly from Chinese property buyers.

According to the country's foreign ministry, more than 80 percent of the 1,526 resident permits were from Chinese investors. 

However, some Chinese investors who rushed into getting luxury properties in Portugal felt shortchanged because they found out that they could have gotten a better deal. 

Or in some cases, middlemen overcharged them by about a quarter of the value of the transactions.

Demand for Portugal real estate from Chinese property buyers remain high as China allows a more liberal movement of funds. 

At a real estate auction of government-owned properties in Lisbon, 90 percent were Chinese.  Filch Ratings said in a report that the reason could be was that housing in Portugal is among the lowest priced in Europe.

According to the Chinese League in Portugal, Chinese investors wanting to buy a property in Portugal should take more time and not rush to close the deal.

The government's move to tighten controls on the issuance of resident permits and real estate pricing came after investigations were conducted that resulted in the arrest of 11 persons on allegations of  corruption, influence peddling and money laundering in relation to the program.

With foreigners accounting for 90 percent of the 730 Euros in real estate investments last year, the Portuguese government needs to protect these foreign investors, according to financial experts.

"That makes it important for Portugal to treat all foreign investors fairly or they will just move somewhere else," Paulo Silva, head of Aguirre Newman in Portugal, said.

TagsPortugal real estate, Portugal properties