Algarve's Real Estate Boom
The Algarve, Portugal's sunny southern coast, is witnessing unprecedented popularity among visitors, leading to a significant expansion of the real estate market in the region. According to Savills, a real estate agency, property prices in the Algarve surged by over 30% last year.
Surge in American Tourists
This increase is largely driven by a wave of tourism, particularly from American buyers. Over one million tourists from the United States visited Portugal in the first half of 2024, nearly double the number compared to the same period in 2022. The Algarve, known for its stunning sandy beaches, picturesque fishing villages, and year-round favorable climate, has become a prime destination for these visitors.
Direct Flights to Faro
Starting in 2025, United Airlines will offer direct flights from Newark to Faro, the gateway to the Algarve, further enhancing accessibility for American travelers.
Changing Buyer Demographics
Traditionally dominated by British buyers, the luxury real estate market in the Algarve is seeing a shift, with Americans now making up a substantial percentage of high-end home purchasers. According to Kerstin Buechner, co-owner of Quinta Properties, Americans have increased from less than 1% of high-end buyers before the pandemic to a significant portion today.
Impact of Strong Dollar and Limited Supply
The influx of tourists and a stronger dollar are impacting property prices. The Algarve recorded its first sale of a property exceeding €20 million in 2022, and several more have followed since. However, the supply of luxury properties is limited, especially in sought-after areas like Quinta do Lago and Vale do Lobo.
Rising Average Property Prices
Average selling prices for properties in the Quinta area reached approximately €3.5 million in 2023, up from under €3 million the previous year.
Digital Nomad Program Attracting Foreign Buyers
Ricardo Costa, executive director of Luximos, a subsidiary of Christie’s International Real Estate, notes a rising demand for homes in the Algarve attributed to the country's digital nomad program, allowing non-EU remote workers to live in Portugal with a monthly income of at least €3,280.
Golden Visa Program
Since the introduction of the golden visa program in 2012, which linked residency permits to investment in the country, Portugal has become an attractive destination for foreign buyers. Despite recent changes excluding real estate investments from the program, prices in the Algarve remain unaffected.
Conclusion
The Algarve is not only a beautiful destination but also offers a promising real estate market, appealing to American buyers seeking a different lifestyle away from the U.S.
Beach in Algarve. Over one million tourists from the U.S. visited Portugal in the first half of 2024 (Bloomberg)
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