Algarve Real Estate: why is it so tempting to invest in this seaside paradise?

Algarve is and has been one of the most popular locations for expats relocating to Portugal, and for good reason. It is located in the most southern part of the country, with the warmest weather and some of the most stunningly beautiful beaches you will ever see. These sandy escapes dot the coast for miles, and are rimmed with unique, other-worldly geological rock formations, like the limestone cliffs of Lagos, along the southwestern part of Algarve. There you can find the fantastical formations, unique shapes, caves and sinkholes, formed over time by the dissolving rock.

To the east of Faro, the cobblestoned capital of Algarve, you will find more low-lying beach areas with many small barrier islands and lagoons.

The water is blue-green, with crystal-clear hues that invite you in for swimming, snorkeling, surfing, or sailing. When you see the Algarve coast, you are looking at natural luxury. The area boasts over 300 days of sunshine a year, and the temps rarely go over 30º C / 87º F in the summer, or under 15º C / 60º F during the winter.

Because it’s a major tourist destination, English is spoken more frequently than you will find in many other European locations. The coastline is dotted with high-end hotels right along the water, becoming more natural and wilder along the western coast. There is real estate available for all budgets, from luxury villas on the beach, to more affordable homes inland. Investing in Algarve real estate is a solid financial option for increasing equity through appreciation. And the intangible benefits are priceless.

If you want to live in paradise, Algarve is a great choice, but what part of Algarve is best for your needs? Do you want to live right on the beach? Do you want to rent? How much does it cost to actually buy real estate in the Algarve, Portugal? There is so much to enjoy and discover, regardless of where you choose to live in this region. 

Beachfront Real Estate in the Algarve

Prices will be higher along the coast of Algarve vs. further inland, but generally speaking, it is still much  more affordable than similar locations in nearby European countries. Algarve has over 125 miles / 200 km of sandy beaches, and the Blue Flag Association of Europe awarded 87 of Algarvian beaches with the accolades for water quality, cleanliness, and diversity of services in 2020. Seventy-six beaches in Algarve were awarded the Gold Quality Award by Quercus, the National Association for Nature Conservation in Portugal. All of this means that prices will reflect the quality of your environment when considering a beachfront property.

Rental Real Estate in the Algarve

The advantage of buying along the coast of Algarve is the strong rental market. Algarve is the destination for beach tourism in Portugal, and tourism is thriving there. During the pandemic, tourist activity suffered, just as it did globally. But Portugal excelled in preparing itself for success by becoming one of the most vaccinated countries in the world, with approximately 98% of those eligible being fully vaccinated. The tourism market bounced back and is now close to pre-pandemic levels, though not there yet.

A recent survey by The Expat Insider, comparing 59 destinations around the world, rated Portugal as the best destination for expats in Europe, and the fourth best in the world. That bodes well for the real estate rental market, as well.

The cities where expats gravitate to relocate in Portugal are also the places that have the most tourism, so real estate in these desirable areas is going to remain a great investment over time. Some expats live in their homes for part of the year, and rent them out  during the high season. No matter how you choose to use your property, you will be able to cash in on the increasing value over time.

Real Estate in Lagos, Algarve, Portugal

Lagos is one of the most visited locations in Algarve, and one of the most beautiful. However, it has not become a typical tourist town, instead retaining all the historical and natural character of the region. Known for its walled-off historic center, Lagos’ cliffs offer panoramic views of the Atlantic. You’ll be mesmerized by its old castles and churches, as well as the charming, authentic cobblestoned roads.

Idealista reports a substantial 24.5% increase in average real estate prices per square meter from 2022 to the start of 2023. As of March 2023, a flat in Lagos has an average selling price of $4,476 USD per square meter, while a house or villa has an average selling price of $5,855 USD per square meter. Lagos has some of the higher priced real-estate in all of Algarve, but for good reason. Of course, the luxury villas right on the water can cost into the millions. Whether you're searching for a cozy family home or a luxurious retreat, Lagos has a wide range of options to choose from.

Real Estate in Tavira, Algarve, Portugal

Nestled in the eastern Algarve, Tavira stands apart from the rest with its unique blend of traditional architecture and welcoming ambiance. The allure of its whitewashed houses, adorned with blue facades, is only heightened by the charm of its ancient churches.  What was once a humble fishing village has blossomed into a riverside town, replete with historical landmarks that testify to the city's rich heritage. The seven-arched Roman bridge stands as a testament to the city's past, imbuing it with an old-world flair, punctuated by Moorish influences. As the largest city in the eastern Algarve, Tavira is easily accessible from Faro International Airport.

According to Idealista, the average real estate prices per square meter have experienced a remarkable 24.1% increase between 2022 and the beginning of 2023. As of March 2023, the average selling price per square meter for a flat in Tavira is $3,263 USD, while the average selling price per square meter for a house or villa is $3,384 USD. Keep in mind that the real estate market can be unpredictable, and prices can fluctuate. However, with the current trends, it appears that investing in Tavira's property market could prove to be a smart financial decision in the long run.

Real Estate in Aljezur, Algarve, Portugal

Looking for a place to call home where you can escape the hustle and bustle of city life? Look no further than Aljezur! This picturesque town, nestled inland from Portugal's western Costa Vicentina, is a hidden gem just waiting to be discovered. With its mix of traditional and modern architecture, exceptional restaurants serving up the freshest seafood, and breathtaking views of the Atlantic, Aljezur has everything you need to live your best life. This idyllic town is a haven for outdoor enthusiasts, with a plethora of activities to choose from. Hiking through lush forests, biking along rugged trails, and catching some waves while surfing are just a few of the ways you can immerse yourself in the natural beauty of the region. And for golfers, the nearby Parque da Floresta offers a world-class course to test your skills.

According to Idealista, the average real estate prices per square meter have witnessed a substantial 27.2% surge from 2022 to the start of 2023. As of March 2023, a flat in Aljezur has an average selling price of $3,470 USD per square meter, while a house or villa has an average selling price of $4,997 USD per square meter.

Business Investments in Algarve, Portugal 

Many entrepreneurs and digital nomads have decided to make Algarve their permanent home and center of operations. The region is known for its laid-back vibe and breathtaking scenery, but it's also a hot spot for healthcare, wellness, elder living, technology, and renewable energy, with over 200 IT companies already in the area.

Agriculture remains an important activity in the interior, with citrus, figs, almonds, carob, strawberries, and cork being the main crops. The aquaculture industry is also growing, with clams and oysters being among the region's most important products. 

If you’re considering a business investment, this region should not be overlooked. Boasting a diverse range of investment opportunities, from startups to real estate, agriculture, and tourism, Algarve is a promising destination for those seeking to grow their portfolio.

Whether you are considering investing in a business or buying a home in the Algarve for rental, residential or retirement purposes, there are a variety of options available at different price points. Regardless of your choice, you'll have access to some of the most stunning beaches in Europe. It is not the cheapest place in the world to live, but it’s still a deal compared to many of its European neighbors, and comes with so many other perks besides all that has already been mentioned. 

Our company, moviinn, is here to help people who are considering the move to Portugal. We assist with every aspect of the transition, from relocation to integration. For more information, please book a call with us.