More than half of the property investment in the Algarve region is from foreign sources, according to Engel & Völkers' Market Report Portugal. Investors are predominantly German, British, and Belgian.
Foreign property investment is most prevalent in the Lagos area, currently accounting for around 82% of transactions handled by the agency. In Albufeira-Carvoeiro, foreign investment represents 72% of property purchases, and in Tavira, the percentage is 92%. In Vilamoura and Faro, half of the investors are international.
“The most sought-after properties in the Algarve are villas with three to four bedrooms, typically between 200-300 square metres, usually with a pool, large outdoor areas, and close to the beach. Specifically, in Vilamoura, there is also demand for apartments with two to three bedrooms and spacious terraces,” reveals the estate agency.
Regarding the increase in house prices in 2023, the area that saw the greatest rise compared to the previous year was Lagos. Portimão, Vilamoura, and Albufeira experienced the least significant increases in 2023: Vilamoura and Portimão saw a 12% increase, while Albufeira saw a 17% increase. Faro and Tavira experienced increases of 20% and 25%, respectively.
In terms of the rental market, the highest prices are in Vilamoura, where the rate is €9.40 per square metre, and in Portimão, where rental prices are around €9.25 per square metre. In Albufeira, Tavira, and Lagos, prices recorded in 2023 are around €9 per square metre. The area with the lowest rental prices in the Algarve is Faro, where prices are approximately €7.30 per square metre.
Find out more about the most sought-after areas for second homes in the Algarve.
What are the most sought-after areas in the Algarve for second homes?
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