Proudly serving communities in over 30 countries, Engel & Völkers advisors are equipped with local and global expertise—allowing us to create unmatched, tailored real estate experiences. Whether in the Americas, Europe, Asia, Africa, or somewhere in between, an Engel & Völkers advisor is ready to make a connection. This month, we’re featuring Portugal’s southernmost region, the Algarve.
Known for its Atlantic coast surfing and luxury golf results, the Algarve is home to both natural and manmade wonders. Bizarre yet equally breathtaking rock formations line its rugged coastline, and with 300 days of sunshine per year, there’s no question why retirees, golfers, surfers, and nomadic workers alike are migrating to this region. Despite the recent influx of migrants from countries like the United States and Canada, it has only 500,000 inhabitants—one of the lowest population densities in Europe—which allows the region to maintain its unspoiled natural beauty.
Sought-after Towns
Vila do Bispo
The small town Vila do Bispo is in a natural conservation area that runs along the entire southwestern coast of Portugal. With a sparse population and a coastline dominated by wild sandy beaches and steep coastal cliffs, the town draws buyers looking to live amidst unspoiled nature.
Lagos
Beyond the seaport of Lagos‘ beautiful beaches, the historic town is home to many restaurants and cafés. It is one of Portugal’s first cities to join the new “Slow City” movement—providing a refuge from the frenzy of modern life with reduced noise, controlled traffic, increased pedestrian areas, and support for local products.
Alvor
Set alongside a protected lagoon, the charming fishing village of Alvor has preserved its original character and charm with its historic center, narrow streets, and whitewashed houses. Families, children, and snorkelers alike are particularly fond of the beach Praia de Alvor, which stretches for miles.
Ferragudo
The small fishing village of Ferragudo has also retained much of its original flair. Its picturesque streets provide a glimpse of what it was like in times gone by. The area is ideal for those seeking a quiet lifestyle.
Carvoeiro
Carvoeiro is surrounded by impressive natural scenery. Beautiful rocky coves attract people who enjoy boat trips through twisting caves and walks along spectacular cliffs. With printing nature, stunning homes, and breathtaking ocean views, Carvoeiro is a splendid resort town.
Albufeira
Albufeira, located in the Central Algarve, is famous for its fine, sandy beaches and crystal-clear waters. Popular among homebuyers in Great Britain, the old town provides residents with numerous restaurants, bars, and clubs, as well as a marina with all the amenities to satisfy the needs of mooring boat owners. Homes with views of the city’s immediate natural surroundings, including impressive cliffs and magnificent ocean vistas, are highly sought-after.
Boliqueime
The small village of Boliqueime is situated on the slopes of a small hill within sight of the Atlantic. With its traditional houses and narrow streets, the village features beautiful properties with mountain and ocean views. It’s the perfect home for anyone looking to enjoy a quiet life in the countryside.
Vilamoura
Vilamoura is known for its excellent urban planning and high quality of life. Residents benefit from a range of local amenities, including an international school, golf school, tennis academy, sailing school, and riding school. Thanks to its marina and nearby golf courses, the town also attracts many affluent visitors.
Vale do Lobo and Quinta do Lago
Vale do Lobo and Quinta do Lago are exclusive holiday resorts with numerous first-class golf courses. The surrounding countryside is dominated by the western foothills of the Ria Formosa Natural Park, where sprawling dunes line the length of long sandy beaches. These prestigious resorts rank among the most important real estate developments in Europe. Buyers are attracted here by the security and excellent amenities on offer, including sports centers, fashion boutiques, and Michelin-starred restaurants.
Tavira
Tavira is also beautifully situated amidst the lagoons of Ria Formosa Naural Park. Buyers in Tavira are often attracted to the town’s cultural atmosphere, relaxed lifestyle, fascinating architecture, rich history, and easy access to paradisal beaches.
Praia Verde
The sprawling sandy beach of Praia Verde lies nestled in the magnificent dunes of the Eastern Algarve. Buyers here can find the consummate beachfront property, complete with superb water sports facilities. The region is unique for its direct beach access, ample privacy, sparse population, and eligibility for the Golden Visa Program.
Buyer Profile
The Algarve is a luxury, second-home market favored by international buyers looking to enjoy an active working life:
Only 10 percent of buyers are purchasing a first home. The vast majority of clients are looking for a second home.
Less than 20 percent of buyers are Portuguese citizens. Around 80 percent of buyers are foreign nationals, with the majority from the United Kingdom.
The number of American buyers and market share is on the rise. In 2022, the amount of Americans living in Portugal rose 45% from the previous year
Many buyers come from Germany and France, while others are from Sweden, Switzerland, Holland, and Belgium.
Many buyers are golf enthusiasts, as the Algarve is home to many excellent courses.
Portugal’s Golden Visa Program plays a prominent role in recent years. Designed to attract foreign investment and boost the Portuguese economy, the program enables non-EU/EEA citizens to obtain permanent residency and citizenship in exchange for a five-year investment in Portugal. Real estate investments start at 500,000 euros (532,043 USD).
What’s unique about the visa permit is that the investor only has to spend about seven days a year in Portugal to maintain their residency while still reaping all the benefits of being an EU resident, including visa-free travel in the entire Schengen Area. By far, the leading share of Golden Visas has been issued to Chinese nationals, followed by Brazilian, South African, and Turkish citizens.
The program has been so successful and sought-after that restrictions have recently been enacted; since, Golden Visas have ceased to be issued in most coastal regions of Portugal. In the Algarve, property buyers can currently only obtain a Golden Visa in the eastern region of Castro Marim (Praia Verde).
Market Trends
The “co-primary home” concept
Rather than just for a few weeks of vacation time, second homeowners are increasingly staying in their holiday properties for longer periods. Small villas and premium properties with contemporary architecture, traditional features, and large outdoor spaces are in strong demand. Buyers are also looking to ensure their new property has room for a home office.
Strong demand for higher-quality, higher-priced properties
Buyers are demanding higher and higher standards for their second homes; they expect a high quality of construction and finishes and homes flooded with natural light throughout. Ocean views and beach proximity are also frequent criteria for buyers —who are willing to pay a higher price for a property with these amenities.
The buyer group is getting younger
Increasing numbers of young people can now work remotely, making real estate purchases a more attractive and viable option. Compared to major cities, people in the Algarve can afford a house with more acreage and enjoy a host of outdoor activities after work—all with 300 days of sunshine per year. Drawn by these benefits, more and more young people are choosing to settle permanently in the Algarve.
Average Price in the Top Segments
Prices per square foot for properties in the uppermost segment of the Algarve range from 43,000 to 86,000 USD.
In Lagos, a premium two bedroom apartment costs between 427,000 to 588,000 USD, and a three bedroom villa costs between 1.6 and 2.1 million USD. In Albufeira, exclusive villas cost around 2.1 million USD, while villas in Vilamoura have a price tag closer to 3.2 million USD.
Listing Spotlight
Overlooking the Tre Torri neighborhood
The highest-priced property currently on the market with Engel & Völkers in the Algarve is a lavishly designed villa on an expansive plot spanning almost seven acres in Lagos. The $12.8 million USD estate consists of an eye-catching main house (inspired by the construction of a ship) and a guesthouse. Its lot sits alongside the Palmares Ocean Living & Golf Resort and borders its international 27-hole golf course. Panoramic views stretch out to Lagos Bay, yet the town is just ten minutes away by car.
For a look at all of Engel & Völkers’ current listings in the Algarve, click here.
Contacts
For further information about the property market in the Algarve and/or referrals please contact:
Sandra Matos
Office Manager, Engel & Völkers Lagos
+351 919 954 218
Felix Bach
Office Manager, Engel & Völkers Portimão
+351 282 071 131
Cristina Santos
Licence Partner, Engel & Völkers Albufeira, Carvoeiro, and Vilamoura
+351 289 572 450
Vasco Fernandes
License Partner, Engel & Völkers Quinta do Lago
+351 289 395 165
João Agualusa
License Partner, Engel & Völkers Faro and Tavira
+351 938 533 413