ALGARVE P L U S
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investing significant sums in the Algarve. Arrow Global, European leaders in asset management specialising in real estate are pouring €500 million into seven new projects in 2024, adding to their existing €1 billion investment. Developers are realising the advantages of incorporating hospitality brands into their real estate projects, following past success stories. Even in areas not traditionally considered premium, such as Albufeira, there has been a noticeable uptick in developments. Projects like Masana and Quinta Dourada, though unbranded, have been shaping the landscape. More frequently than ever, developers are expressing a desire to invest in the Algarve. Funds like Bondstone, FERCOPOR, and AEDAS Homes are fuelling the region’s real estate boom. And it’s not just about money; it’s about confidence. Developers are brimming with optimism for the Algarve. In an interesting contrast, the real estate market in major cities like Lisbon and Porto is cooling off, while the Algarve continues to grow.
Pricing: a journey through the Algarve’s luxury landscape Serenity, a new residential apartment building project in Vilamoura, was launched on 1 September. With an average price of €7,800 per square metre, it promptly sold ten units out of 53 within 39 days. Prices in One Green Way in Quinta do Lago and Voco Formosa Park – Algarve, are averaging at €9,300 per square metre. However, it’s not just about big names and luxury resorts. Branding plays a pivotal role in determining demand. The W Residences in Albufeira sold at record pace which can be attributed to the strength of its brand. Ombria Viceroy features a price per square meter close to €6,600. Located in the interior of the Algarve, this project is a mere 20-minute drive from the beach, a reminder that the Algarve’s appeal stretches far beyond its coastline.
Stability in pricing: a silver lining The consistent trend across resorts and developments is a lack of price reductions. Despite a surge in new properties entering the market, prices remain stable. The high cost of construction, paired with strong demand, has created an environment where developers are in no hurry to reduce prices. This stability can be seen as a reflection of the confidence in the Algarve’s real estate sector.
An interesting aspect to consider is the changing landscape of touristic developments. Some properties were previously obligated to be part of a rental pool for a set period. However, with the imminent end of the Golden Visa programme, the pricing structure may become less attractive. Consequently, this product may experience a setback, as the yields offered fall short of what is currently accessible in the financial market.
Potential global impacts: a glimpse of the future The Algarve’s appeal extends far beyond its geographical borders. On the global stage, there are both positive and challenging factors that may influence its real estate market.
Positive Impacts It’s worth celebrating Portugal’s continued success on the world stage. The country recently clinched the World’s Leading Destination 2023 at the World Travel Awards, a distinction it has earned six times. Furthermore, the Algarve has been recognised as Europe’s Leading Beach Destination, and Vale do Lobo as Europe’s Leading Lifestyle Resort. Such accolades underscore Portugal’s enduring appeal and its ability to attract property buyers from around the world.
Our Market Here at QP we are seeing supply and demand which remain largely in sync. In 2023, the nationalities of our buyers continue to tell an international story. 95% of our market is composed of international buyers, primarily from the United Kingdom. In conclusion, the Algarve’s real estate market is not just a story of numbers, trends, and statistics; it’s a tale of resilience, innovation, and enduring appeal. From the dynamic marketplace filled with luxury developments to the charming villages dotted along the coastline, the Algarve continues to cast its spell on property seekers from around the world. As the sun sets over the golden sands of this enchanting region, it’s safe to say that the Algarve’s real estate market has a story that is uniquely compelling, and one that is far from over.
Alison Buechner Hojbjerg is co-owner/director at QP Savills
what the future holds
REAL ESTATE PLUS
While the future appears bright, there are some considerations that investors, both existing and prospective, should keep in mind. As the market evolves, it’s crucial to remain informed about the changing landscape. More competition: The influx of new developments has the potential to create a more competitive environment, which could have positive repercussions by cleaning up the market’s exponential growth. Social pressures: The cost of housing in Portugal has led to social pressures and inconsistencies in government policies. It’s a complex issue that requires careful management. Travel restrictions: The 90-in-180-day rule for nonEU buyers, which has been in place since Brexit, has had a limited impact on 80% of buyers who continue to invest in the Algarve. Changing zoning laws: The PDM, the local zoning laws, are expected to be updated, which could impact the ease of building new private properties. While this may exacerbate the lack of supply, it could further support higher property values for existing properties. AL Licensing Laws: Recent changes in licensing laws impact how properties can be rented out on a short-term holiday basis. While privately-owned apartments are no longer granted licenses for shortterm rentals, this change primarily affects the lower end of the market.
