The Algarve region on Portugal’s sunny southern coast is more popular with tourists than ever before, and as a result, the region’s housing market is booming: Prices for prime properties in the Algarve have risen by more than 30 percent in the past year, according to property firm Savills.
Agents say a tourism boom is boosting purchases, with American buyers especially visiting Portugal in record numbers. More than one million US tourists are expected to visit Portugal in the first half of 2024, Double the number According to the country’s National Statistics Office, visitor numbers for the same period in 2022 are expected to reach 1 billion.
The Algarve region, with a population of fewer than 500,000, is particularly popular with tourists who flock to the region for its famous sandy beaches, pretty fishing villages and year-round warm weather. Starting in 2025, United Airlines plans to offer nonstop service from Newark to the region’s gateway, the city of Faro.
“Historically, the Algarve property market has been dominated by mainly British buyers, but that is changing.” Quinta Properties, Savills’ affiliate in the region.
She says that while Americans made up less than 1% of luxury home buyers in the Algarve before the pandemic, they are now a “significant percentage.” According to the Portuguese Real Estate Association, 10% of foreign buyers in the country are American. “If you walk around Loulé, now every second person is American,” she says. “It’s incredible.”
An increase in tourism due to the strong dollar is affecting prices. The first sale in 2022 was for more than €20 million, a record for the area, but Büchner said Quinta Properties has sold several properties at that level since then. As a result, the supply of prime properties is tight, especially in popular areas such as Quinta do Lago and Vale do Lobo.
“There are fewer properties on the market than ever before and demand is much higher than before,” she said. Quinta Properties’ average prime sales price has risen to nearly €3.5 million in 2023, up from less than €3 million last year.
Ricardo Costa, chief executive of Luximos, a subsidiary of Portugal’s Christie’s International Real Estate, also said foreign demand for homes in the Algarve was growing. Digital nomad program in the country The main reason is that remote workers from outside the European Union can reside in Portugal if they earn a monthly salary of at least 3,280 euros and have savings of at least 9,840 euros.
“People love the mild climate, great surfing conditions, stable politics, and the ability to work remotely, only five hours from the U.S. East Coast,” Costa says. “We often say that in the southwestern corner of Europe, Americans are our next-door neighbors.” And in the housing market, he adds, 1 million euros typically sells for much more in Portugal than in other popular tourist destinations like the French Riviera or the Greek islands, or in many big U.S. cities.
This is the first time since 2012 that Portugal has become a hotspot for foreign buyers. The country introduced the “Golden Visa”The system links residence permits to domestic investments, including property purchases, which the previous government removed from the system last year in the wake of soaring property prices, but this has not affected prices in the Algarve.
Foreigners can qualify for a Golden Visa by investing at least 500,000 euros in an investment fund. Other options include donating to cultural or research projects.
“The Golden Visa program has certainly created a sales frenzy,” says Quinta Properties’ Buechner, but adds that the Algarve has not seen a drop in foreign buyers. “It’s not just about the Golden Visa. Americans are coming to Portugal because they’re tired of the U.S. and they’re looking for a different lifestyle,” Buechner says. “The Algarve offers that.”
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