Algarve's Real Estate Surge
The Algarve, the sunny southern coast of Portugal, is experiencing unprecedented popularity among visitors, resulting in a booming real estate market. According to real estate agency Savills, luxury property prices in the Algarve have surged by over 30% in the past year.
Record Tourist Arrivals
Real estate agents report that the tourism wave is driving purchases, particularly from American buyers, who are visiting in record numbers. Over one million US tourists visited Portugal in the first half of 2024, nearly double the number from the same period in 2022, according to the national statistics agency.
A Unique Destination
Visitors are particularly attracted to the Algarve for its famous sandy beaches, charming fishing villages, and temperate climate year-round. Starting in 2025, United Airlines will offer direct flights from Newark to Faro, the gateway to the region.
Changing Buyer Demographics
Kerstin Buechner, co-owner of Quinta Properties, notes that the top segment of the Algarve real estate market, historically dominated by British buyers, is shifting. Americans have risen from less than 1% of high-end home buyers before the pandemic to a substantial percentage today. According to the Portuguese Property Association, 10% of all foreign buyers in the country are now American.
Impact of Strong Dollar
The influx of buyers with a stronger dollar is affecting prices. The first sale above 20 million euros (approximately $123 million) in the region occurred in 2022, and since then, Quinta Properties has sold several properties at that level. The supply of luxury properties is tight, particularly in popular areas like Quinta do Lago and Vale do Lobo.
Increased Demand for Remote Work
Ricardo Costa, executive director of Luximos, an affiliate of Christie's International Real Estate in Portugal, has also seen a rise in foreign demand for homes in the Algarve, citing the country's digital nomad visa program as a key factor. Remote workers from outside the EU can live in Portugal with a monthly income of at least 3,280 euros and savings of at least 9,840 euros.
The Allure of Algarve
Costa emphasizes that the region's mild climate, stable political conditions, and proximity to the East Coast of the US make it attractive for Americans. Additionally, 1 million euros stretches much further in Portugal than in other popular tourist areas like the French Riviera or Greek islands.
Golden Visa Program
Portugal became a hotspot for foreign buyers in 2012 with the introduction of golden visas, which linked residency permits to investments, including real estate purchases. Although rising property prices led the previous government to exclude real estate investments from the program last year, this has not deterred buyers in the Algarve.
Foreigners can still qualify for the golden visa by investing at least 500,000 euros in investment funds or through donations to cultural or research projects.
Buechner points out that while the golden visa program sparked a frenzy in sales, the Algarve continues to attract foreign buyers. Many Americans are seeking a different lifestyle, and the Algarve offers just that.
Comments
Join Our Community
Sign up to share your thoughts, engage with others, and become part of our growing community.
No comments yet
Be the first to share your thoughts and start the conversation!