Americans flocked to Portugal for cheaper, more peaceful lives, but newcomers also brought crowds and drove up the cost of living

• Americans have been moving to Portugal for years, and the pandemic accelerated the trend further.
• They've enjoyed a relatively easy visa-application process, affordability, and universal healthcare.

Dan and Michelle Bagby were worn out.

They had succumbed to the United States' round-the-clock work mentality, pulling extra-long days in their digital marketing and project management jobs. They wanted a more laid-back lifestyle, and decided Portugal would give it to them.

"The climate in the US is a bit intense sometimes," Dan Bagby, 36, told Insider. "There's the hustle culture of working the corporate nine-to-five, so we wanted to try the European lifestyle out and see what the difference was and how we would like it."

In 2021, they sold their house in Austin, Texas, and moved to Portugal's capital, Lisbon. They plan to stay for at least three more years, when they'll be able to qualify for citizenship.

The Bagbys are part of a wave of Americans who have moved to Portugal, a country roughly the size of Indiana, seeking a more affordable and easygoing culture, and who are attracted by its relatively seamless visa process.

Remote workers, digital nomads, and retirees from the US flooded the Western European country during the early stages of the pandemic. Close to 10,000 Americans were living in Portugal in 2022, according to data from the Portuguese government, as reported by The New York Times — an increase of 239% since 2017, or a little fewer than 7,000 people.

While buyers from countries like Brazil and Finland are also on the rise, Americans have taken a particular shine to Portugal's lifestyle, said Gonçalo Roxo, the cofounder of Your Property Advisor, a real-estate consulting company that helps foreign citizens buy homes in Portugal.

"In 2020, maybe out of 10 clients, one would be American," Roxo told Insider. "Now, out of 10, maybe five are Americans."

According to data from the Portuguese Immigration and Border Service, 216 of the 1,281 foreigners granted permanent residence in Portugal during 2022 came from the United States, the most of any country.

Portugal made its borders more accessible to foreigners to give its economy a shot in the arm, and Americans have taken advantage — so much so that it's turbocharging the real-estate market and creating issues for locals like rising home prices.

Eurostat, the European Union's statistics agency, found that house prices in Portugal rose 157% between 2020 and 2021, with rents rising 112% between 2015 and 2021. And much of that rise has been fueled by outsiders like foreign investors and tourists seeking short-term rentals, the Associated Press reported.

In an effort to stem the tide of monied outsiders, Portugal is sunsetting its "golden visa" program, which grants foreigners a residency permit when they purchase real estate worth at least €500,000, or about $541,125. Still, there are other ways for foreigners to seek out residency in Portugal, and as long as the country continues to offer the perks that many Americans have moved there for — like a lower cost of living and universal healthcare — they will come. But as housing prices rise, those perks are a little less sweet than they used to be.

Portugal's accessible residency program made it a popular choice for foreigners looking to migrate

Still, people are intrigued by the prospect of moving to Portugal. They're taking advantage of companies that have propped up to help them relocate, and joining Facebook groups by the thousands where movers to the country share tips and tricks.

Applications for the golden visa are open until July 1, according to second-citizenship firm Savory & Partners. Americans are also finding their way to Portugal through a D7 visa — nicknamed the digital nomad visa, used by the Bagbys — which allows non-EU citizens with passive or independently earned monthly income of at least €760, or about $818, to receive a temporary residence permit.

Judi Galst, the associate director of private clients at investment and migration consultancy firm Henley & Partners, said that the pandemic motivated Americans to seek out passports that allow for easier travel, particularly those in the Schengen Zone, like Portugal's. Passport holders of countries in the Schengen Zone can move freely between 27 European Union member countries. But, she noted, the political climate in the US also played a part.

"Things have become very divisive," Galst said of the United States. "Regardless of which side you're on, and I talk to clients on both sides, people feel unsettled, and it's prompting them to want to understand what their options are."

Galst said there are other ways to secure a residency permit than through the "golden visa" program.

She told Insider that investing the same amount of money into one of a few dozen qualified private equity or investment funds, or a bank deposit of €1.5 million, or about $1.6 million, into a Portuguese bank, will also put foreigners on the pathway to permanent residency.

The country offers perks that are no longer affordable in the United States

Janet Zaretsky and her husband, Lee, bought a house in Nazaré, Portugal, a coastal city 75 miles north of Lisbon known for its huge waves that draw surfers.

Zaretsky, 67, plans to retire at the end of the year, but got a head start by moving to Portugal in January.

Two of her requirements for retirement were a house with an ocean view and good medical care — two features available to her in Portugal at a lower price than in the US.

Portugal has universal healthcare coverage, financed through taxation, that's available to citizens and legal residents, at no cost. In the US, the average annual premium was $7,911 for single coverage in 2022, according to a report from health care non-profit KFF.

On top of the lower expenditures on healthcare, Zaretsky said day-to-day costs are more affordable, too.

"It's a very reasonable cost of living," Zaretsky told Insider. "We could buy an ocean-view house that we couldn't afford in California," where Zaretsky lived for 10 years before moving to Texas.

Zaretsky paid €600,000, or about $648,741, for the house in Portugal after selling her Austin, Texas, home for $676,000. So far she and her husband prefer the lifestyle change.

"We love Europe, we love history, we love diversity, we love culture, and architecture," she said, all of which they find in abundance in their new home.

Rising real-estate prices are squeezing some people out

Some Americans who have relocated to the Western European country say it isn't without its faults.

Portugal has a strong tourism economy and its shoulder season draws large crowds, making the petite coastal country feel tight. And while the slow pace can be inviting, Zaretsky and Bagby agree that it takes a while to get things done.

Americans are used to 24/7 convenience and the ability to access anything at all times. Europeans have a more relaxed approach to business, with many shops closing for hours in the middle of the day for lunch — or closing just because.

"My wife was looking to frame a picture and wanted to get a custom frame," Bagby said. "She walked to a framing shop that has hours posted and then on the door it just says, 'Oh sorry, we're closed today.'"

The cost of living is also soaring as an international crowd makes Portugal their home.

Jack Epner, a 42 year old in sales and marketing who has visited three continents while working remotely, wanted to finally settle down.

After leaving Vail, Colorado, in 2018, he spent two years bouncing around Asia, Europe, and South America before landing in Portugal in 2020.

His plan was to establish himself there.

"I went through several steps of the residency process," Epner told Insider. "The plan when I went there was to stay long-term and have residency."

Epner was renting and living in Airbnbs, but had a hard time finding an affordable place as rents started to increase.

"There were really small places people were asking a lot of money for — two or three times what it would've been just months earlier," he said.

Bagby agreed that Portugal isn't as affordable as it once was and is advertised still, and thinks potential movers should do more research before making the transatlantic leap.

Bagby locked in a three-year lease for €1,700 a month, or about $1,830, but said that the same three-bedroom apartment would go for €2,500, or about $2,691, or more now.

"When it comes to looking at Portugal as an affordable place to live or not, it just really comes down to what your lifestyle is," Bagby said. "If you live in New York or San Francisco, pretty much anywhere in Portugal is going to be a cost break for you. But people just assume that everywhere in Portugal is really affordable."

"That's the main misconception I see out there," he added. "People end up not being able to stay for the long term because they weren't really prepared for the difference in living here."