All of which makes it a mystery as to why, when it comes to investment, it has been largely ignored. While comparable cities such as Barcelona have soared in popularity and price, Lisbon has remained steady. Quietly and calmly, she has been improving her prospects without losing any of her flavour.

Now, Lisbon is starting to appear on the property radar thanks to increases in tourist numbers and the few high-end agents that have started to sell there.

Lucas Fox is one of the first agents to scout out the city, and Paul Houston, who runs the local office, thinks Lisbon's time has come. "We've been getting a lot of interest lately, " he says. "We've seen a lot more visitors, tourist numbers are up, even through winter. That interest then trickles down into property . . . people come here and fall in love with it.

Plus, prices are competitive compared with other capitals."

He says that average prices in the nicest areas of town are around 2,950 to 3,530 per square metre (half what you might pay in Paris or Madrid), but prices of 2,015 are not unusual in less sought-after areas. "Renovation projects in character apartments with stunning views cost on average 3,225 per square metre, " says Houston, "and that's fully refurbished, everything new."

Lisbon is full of dilapidated palaces that are being targeted for restoration and conversion. These are fabulous, but at around 593,000 for two bedrooms, they won't be the cheapest you can find.

Instead, Lucas Fox currently has several attractive apartments costing less than 178,000.

On Houston's books, there is a cosy studio with river views priced at 141,000. He also has a pretty one-bed loft in a quaint side street for 166,000 and a lovely two-bed with great city views on the edge of Barrio Alto for 171,400. For upwards of 252,000, apartments get better located with more space and possibly an outside terrace or courtyard.

Lisbon is built across several hills with each of its districts offering a different perspective on the city. Houston says the best areas to look in are the Castelo (castle) district, Baixa (downtown), lively Rossio and genteel Chiado.

He also mentions the Barrio Alto (old town), which is up and coming.

"It's a very manageable city, " says Houston. "The centre is only about two kilometres across. It's good for tourists if you're planning to rent out your property." Renting will net you on average 85 to 105 per night in a decent one-bed apartment, but your main tenants will be short-term. Long-term contracts, usually one or two years, will bring in around 1,000 per month.

What is enticing people to live and visit is the increase in regeneration.

Everywhere you look, Lisbon is getting a facelift. Buildings are being cleaned up and a new transport system is going in.

A high-speed rail link from Lisbon to Madrid was recently approved.

"Lisbon still has its local bars and shops. The people here haven't changed and there is still a sense of the real Portugal in the streets and cafes, " he says.

"It's a good mix, and that's what appeals."

Lucas Fox: www. lucasfox. com; 00 351 91 45 23 739

BUYERS' GUIDE
>> House price rises in Lisbon have been barely above 5% per annum recently.
>> Though Lisbon is considered pretty safe, it still has some dodgy pockets, even in central areas.
>> Some of the shabbier downtown areas are soon to be cleaned up and regenerated. Property agents predict that prices will increase around these locations once this is done.
>> Parking is a problem, and apartments with spaces are at a premium. Typically they can add around 30,000 to the value.