I'be been living in Portugal for a couple of decades so have a bit of experience in similar climates. I'll share a few thoughts about my experiences here in Portugal. I'm in the Castelo Branco region in case that helps.
Julian Kjellberg wrote:How difficult is it to get permits for simple rural/offgrid living, small structures, wells, rainwater systems, solar systems or renovation projects?
To get permits is not easy. If you get somewhere that's already registered as a dwelling you won't need permits, just go for it. Mostly if you're renovating without changing the external appearance you don't need permits. The registration system for properties is a bit weird and you really need legal advice to interpret the paperwork no matter the seller tries to tell you. Roughly if a property is completely
rustica then it's unlikely you have rights to live there legally, though you are likely to get away with living there illegally, for now at least. If the property has a building registered as
urbana, then generally you're good to go. Some places have a habitation license, which obviously means you can live there legally. Older properties might also be perfectly legal even without a habitation license. It's complex, but I'd strongly recommend getting a place that is legal to live in so you know you're safe. Don't believe the estate agent when he tells you there will be no problems. Invest in a lawyer unless you're prepared to risk it.
Loads of people just buy an acre and live on it without any care about permits. The locals are just beginning to get fed up of this as to be blunt many of them try to live wild and free in the middle of a forest and then set fire to the place because they have no clue about fire safety. The Portuguese fire fighters have recently announced that anyone living in unregistered places in the middle of a forest fire are on their own and resources won't be devoted to rescuing their property.
How serious are the drought and water issues in different regions?
The drought can be severe but if you get somewhere with a good well or water mine there will be no issues. Visit in August when the wells are at their lowest. They are all full in March so no point looking then. With a good water supply you can re-green most places, though it takes time. It's not so much the amount of water as the reliability of it so you can keep things alive during August.
How do locals generally feel about foreigners, especially someone from Sweden, buying rural land and trying to live a quiet self-sufficient life?
I’m not looking for a fantasy escape. I’m trying to understand what is actually practical: water, permits, solar, soil, local acceptance, and long-term stability.
When I moved here over twenty years ago we were welcomed with open arms as being one of the first immigrants in the whole area. These days there are so many immigrants that the question is almost irrelevant. Most of our closest neighbours are immigrants, from all over the place. Mostly the locals are still fine with immigrants though there are some undercurrents now that there are too many with too little clue of what they're doing. Just be responsible, learn about fire safety, don't have dogs wandering loose that kill people's livestock, learn the language, try to drive a legal vehicle rather than an illegal import, get to know your neighbours, that kind of thing. Mostly if you are known to be a good neighbour and look after the land you will be welcomed. Do find the nearest café and talk with the locals though. They will warn you gently if you are trying to buy somewhere with a known bad neighbour, who can make your life miserable.
For long-term stability, take the time to find somewhere with a bit of depth to the soil, with a good water supply, and the legal right to live there. Oh, and don't buy an old mill right next to a river - I've watched scary videos of people who have started to renovate them to live in with apparently no idea why the mill would always be lower down than the actual house. They flood! And the floods seem to be getting worse.
In short, it depends a little on your budget and how much you want to risk. I believe it's worth devoting a bit of time and a bit extra money to finding somewhere legal so you are safe. Prices here are all over the place but rising rapidly. About five years ago my son bought a fully legal stone house to renovate, with an acre of land, for €22 500. Other people seem quite happy putting up a wooden cabin in the middle of the forest and assuming it won't burn and they won't get kicked out. Ultimately, it's your choice.
Good luck with your adventures!