What is driving the rising property prices in Algarve?
Rising property prices in Algarve are primarily driven by a surge in demand from international buyers, particularly from the United States. Reports indicate that over a million American tourists made their way to Portugal in the first half of 2024, nearly doubling the figures from the same time last year. This significant uptick is leading to increased competition for luxury homes, with experts stating that North Americans now make up a substantial percentage of the market. The top-tier real estate scenes, traditionally favoured by British buyers, are now witnessing sales exceeding 20 million, prompting landlords and developers to adapt to these changing buyer dynamics. Prime locations such as Quinta do Lago and Vale do Lobo are especially popular, marking them as areas where prices are climbing rapidly with each passing year. For investors, the rising values offer potential for strong returns, making now an excellent time to consider an investment in this desirable region. If you're curious about how these trends affect you, reach out to us for tailored insights!
According to Bloomberg, the wave of tourism is boosting business, especially from North American buyers who are heading to the country in record numbers: more than a million tourists from the US visited Portugal in the first half of 2024, almost double the number of visitors in the same period in 2022.
Visitors are heading in particular to the Algarve, for its famous sandy beaches, picturesque fishing towns and temperate climate all year round. From 2025, United Airlines will have a direct flight from Newark to the city of Faro, the gateway to the region.
“The top end of the Algarve real estate market has historically been dominated by British buyers, but that is changing,” says Kerstin Buechner, co-owner of Quinta Properties, a Savills affiliate in the region, quoted by the publication.
According to the expert, Americans have gone from making up less than 1% of luxury home buyers in the Algarve before the pandemic to becoming what she calls a “substantial percentage” today.
And the reality is that this is having an impact on prices. The first sale of more than 20 million, a record for the region, took place in 2022, and Buechner says Quinta Properties has already sold several properties at that level. As a result, prime supply is scarce, especially in the popular areas of Quinta do Lago and Vale do Lobo.
