Real estate in the Algarve: why you should buy a property in the south of Portugal
Property prices in the Algarve, a region on the south Atlantic coast, have always been the highest in Portugal. Demand for housing in the Algarve has not fallen much even during the protracted crisis that has lasted since 2007. And today the “Portuguese Riviera” is experiencing another boom. Let’s look at Algarve real estate from the point of view of a Russian buyer.
Who buys a home in the Algarve
According to statistics from local agencies, property prices in the Algarve have increased by about 10% over the past year. As for rent, in this segment the cost is growing at an even faster rate: over the same period it jumped by 15-20%. However, one should not forget about the seasonality factor. For example, apartments that are rented to tourists for 500-1500 euros per week from May to October can be rented during the “cold” season by paying the same amount per month.
Of course, this must be taken into account if you intend to purchase real estate with the aim of generating rental income. On the other hand, real estate in the Algarve is rarely empty: both foreigners and the Portuguese themselves come here all year round – the infrastructure provides many alternatives to a beach holiday. Although some residents of northern Europe manage to sunbathe (and even get sunburned!) on empty beaches and swim in the Atlantic even in winter.
Last year, 7.7% of properties sold in Portugal went to non-residents. In monetary terms – 11.5% of the total value of transactions. Among foreign buyers, the French lead the way (20%), followed by residents of the UK (16.2%), Brazil (6.9%), China (6.3%) and Switzerland (5.5%). Moreover, 33.5% of the houses and apartments sold to foreigners are located in the Algarve.
Why is real estate in the Algarve attractive?
Despite an average of 1,800 euros per square meter, sales of apartments and houses are showing steady growth. And analysts do not rule out that in the coming years the cost of real estate in the Algarve will increase by one and a half to two times. Why is this region attractive to potential real estate buyers?
The Algarve is a fabulously beautiful place with a wonderful mild climate. The province is protected from northern winds by mountains; from the south, the territory is heated by warm ocean currents. You can feel the proximity of Africa, although the climate here is much milder and friendlier. The average temperature in summer is plus 30 degrees, and in combination with the Atlantic breeze, even 35-40 degree August heat is perfectly tolerated. True, in winter this same proximity to the ocean affects the feeling of temperature – at an average of +15-20 degrees the air is quite cold. However, against the background of 250-300 sunny, absolutely cloudless days a year, all other disadvantages of the local climate become insignificant.
Life here flows at a measured pace: Algarvians are never in a hurry. It seems that time has stopped – or at least slowed down two or three times. By their happy, peaceful faces, you can immediately distinguish the local residents from the ubiquitous fussy tourists. After all, the atmosphere of tranquility that reigns in the Algarve has a magical effect on visitors. It is not for nothing that the Portuguese consider this region the best place for a vacation: not even a week goes by before vacationers here have great difficulty remembering their professional stresses and begin to enjoy endless gatherings in quiet cafes or leisurely walks along the embankment.
The above does not mean that the Algarve may be of interest exclusively to pensioners – although elderly citizens of Great Britain, France and other European countries are moving here en masse for permanent residence.
A well-developed tourism infrastructure, and the region lives solely on tourism; environmentalists have consistently achieved the almost complete eradication of industry – provides a wide selection of different activities for any age and budget.
Luxurious casinos, night bars and discos, water parks, golf courses and tennis courts, hypermarkets and luxury boutiques – all this is fairly evenly distributed along the entire coast. It has everything you need for a comfortable life and a good rest – including almost 50 pristine sandy beaches, marked with the European “quality mark”, the so-called “blue flag”.
Another advantage concerns the purchase of real estate not only in the Algarve, but it is quite significant. Portugal is seeking to attract foreign investors by offering residence permits to both the property buyer and his family members. Similar laws apply in many European countries, but here the so-called Golden Visa has several significant advantages.
- Firstly, a residence permit is issued without any conditions related to the length of stay in the country. It doesn’t matter whether you come to your “house by the sea” for just a week or live in it all year round.
- Secondly, the “entrance ticket” for an investor costs 250 thousand euros – this is the most affordable offer in Europe. There are prerequisites for revising the amount upward, but today you can become an EU citizen for “only” a quarter of a million.
Yes, exactly “citizen”. The fact is that 6 years later, the holder of the residence permit has the right to request Portuguese citizenship. In cases with other similar programs in European countries, this period is 10 years.
You can find out more about the Portugal Golden Visa here.
Which area of the Algarve is better?
The majority of real estate in the Algarve – 48% – is located in the districts of Loule, Albufeira and Lagos. Let’s take a look at typical offerings in these areas.
Loule is the leader in the number of proposals. Located in the area, the seaside town of Quarteira is an excellent place to buy property for subsequent rental. A typical three-room apartment of 250 m2 in a condominium with a swimming pool, located 5 minutes walk from the beach, is valued on average at 250 thousand euros. During the season it can be rented for 700-800 euros per week.
For 590 thousand you can buy a house with approximately a usable area of 150 m2 and a plot of 2600 m2, with a garden and a swimming pool. This is already a suburb – two kilometers from Loule, with views of the mountains and the Atlantic.
A town with the past of a fishing village and amazing architecture. A three-room apartment of 77 m2 is offered for 225 thousand. Do you want a villa near the beach? Count on at least one and a half million euros. Thus, a typical 7-bedroom house in Guia (436 m2) sells for 3.5 million.
In this part of the Algarve, most of the housing is bought by wealthy Europeans. Infrastructure and prices are appropriate. So, for 369 thousand euros you can buy a four-room apartment (123 m2) with a luxurious terrace in the parish of Lagos.
The cost of houses on the coast ranges from 2 to 8 million. However, there are more interesting proposals. If the proximity of the ocean, as well as supermarkets, bars and other amenities of civilization is not important for you, you can find a modest rural house with an area of 80-150 m2. It is unlikely that such real estate can be rented out profitably. But by paying 250-750 thousand, in addition to the house you can get a plot with an orange orchard that bears fruit twice a year.
Other areas of the Algarve
If you are looking for liquid real estate in the Algarve that you intend to subsequently rent out, pay attention to the administrative capital of the region – Faro (2116 properties). There is a university, an international airport and many institutions vital to the region, so property prices are consistently high. Demand is generated not only by tourists, but also by numerous students.
The second most important city in the region is Portimão. This well-maintained modern city is good for both living and relaxing. There are no problems with renting out housing; demand is year-round. Moreover, in Portimão, as in Faro, experts advise taking a closer look at the offers of the secondary market: 10-15-year-old spacious apartments in good condition are offered at a price of 120-150 thousand euros.
According to the Portuguese weekly Expresso, over 30 thousand properties are for sale in the Algarve – 16,089 houses and 14,658 apartments. Depending on location, age, condition and other criteria, prices range between 1440 and 2400 euros per square meter.