Portuguese Property market

Property in parts of Portugal rose in value by as much as 20% (annually) for the last five years, although more generally the market has been relatively sluggish. Queues of northern European buyers have ensured the Algarve remains a ‘hotspot’: with properties to suit most budgets depending on where one locates oneself and golfing facilities that ensure a lengthy tourist rental season. More recently the country’s Silver Coast and Costa Verde, north of Lisbon, started to take off too.

Recently voted the number one location for overseas property buyers, Portugal has much to recommend. Although the Algarve has been a popular destination for British tourists since the 1970s, strict planning rules enabled it to avoid the worst excesses of the Spanish Costas, and the region tends to attract a more upmarket crowd than do the ‘pile ‘em high, sell ‘em cheap’ resorts of its eastern neighbour. The country has done well out of EU membership as well, with much needed infrastructural investments helping it compete successfully for tourism income. Cost can be a disadvantage in the best locations, like Vilamoura and Carvoeiro, though given its position on the Atlantic the climate is cooler and wetter than Spain.

The Algarve, famed for its golf resorts, has been on many buyers’ wish-list for decades, but it is only in recent years that the market has begun to extend into the western and eastern Algarve. Areas around Lagos in the west, and small towns and resorts like Cabanas, Vila Real and Tavira towards the east, now boast of properties that cost three or four times more than the centre of the region, but easily accessible from Faro Airport. Elsewhere, older parts of Portugal’s magnificent capital Lisbon, like the Alfama, are attracting interest. Further north the Silver Coast and Costa Verde - especially rural gems like the Douro and Minho provinces - are catching up on lost time.

For many tourists, Portugal means one thing - golf - and it is worth bearing this in mind when considering what kind of rental returns to expect from Portuguese property. Properties with a sporting connection, especially if these have a pool, are generally easier to let than those without: these attract higher rents, and because boiling hot weather is not essential for golfers, the rental season is longer. Capital growth is expected to be highest on off-plan developments in relatively undeveloped areas like the eastern Algarve and Silver Coast, with improved transport networks helping usher in more potential buyers.

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Portuguese Property market

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