How much does life cost in Portugal? An overview of the cost of living in the Algarve in 2024

Welcome to another article in our blog series "A Life Under the Sun: Moving to Portugal". In this series, we will give you all the important information and tips to make your move to the Algarve as smooth as possible.

Today we dedicate ourselves to a particularly important topic: the cost of living in the Algarve. What is the average expenditure in everyday life? In this post, you will get a comprehensive overview of costs in the Algarve and how they compare to other regions of Portugal, such as Lisbon or the more rural areas. We also provide you with a budget list so that you know what financial resources you should plan for a comfortable life.

Cost of living in Portugal: The Algarve compared to other regions

The cost of living in Portugal varies greatly depending on the region. The Algarve tends to be one of the more expensive areas, especially the popular coastal towns such as Lagos, Albufeira or Vilamoura. Compared to the rest of the country, rents and property prices are higher here, however, the cost of living in the Algarve is still significantly lower than in Lisbon or Porto.

Rental costs: Algarve vs. Lisbon

Lisbon, the capital of Portugal, is known for its rising cost of living, especially in terms of rents and property prices. According to the "INE" (Instituto Nacional de Estatística), rents in Lisbon are about 20-30% higher than in the Algarve, while services and leisure activities are also more expensive in the capital.

A 1-bedroom apartment in Lisbon costs between €1,000 and €1,800 per month, while similar apartments in the Algarve range from €800 to €1,200 in cities such as Lagos or Faro. Of course, there are also regional differences within the Algarve, with less touristy or more rural areas often offering cheaper rental prices.

Lisbon is also more expensive than the Algarve when it comes to grocery shopping or restaurant visits.

Rental costs: Algarve vs. rural regions of Portugal

Compared to small villages and rural areas in the interior of Portugal, such as the Alentejo or the north of the country, the cost of living in the Algarve is higher. In these rural areas, you can rent an apartment from around €400 a month, which is impossible in the Algarve. Also, the prices of restaurants, services, and even gasoline are often lower in these areas.

Another point that has a strong influence on rental prices in the Algarve is the holiday rentals. For example, in the high season (July & August), the prices for rental apartments in the coastal regions often rise significantly, while in the low season (October to May) they are significantly cheaper. Many properties in the Algarve are also often only available for short-term rental, so that the supply of apartments for long-term rent is rather low.

How much does it cost to live in the Algarve? An overview of the cost of living

Monthly budget for living in the Algarve

Monthly expenses in the Algarve depend heavily on individual lifestyle, location and personal preferences. Roughly estimated, the cost of living can be as follows:

• For a single person: approx. 1,300 - 1,500 € per month
• For a couple: approx. 1,800 - 2,300 € per month

These estimates are only indicative and may vary depending on your lifestyle and whether you live in a larger city or a quieter village in the Algarve. In popular cities such as Lagos or Albufeira, the cost can be slightly higher, while in less touristy areas such as Monchique or other places off the coast, the cost of living is slightly lower. Apart from the rental costs, there are other important expenses that should be taken into account when planning your budget. These include above all the running costs for the household, such as electricity, water and so-called "condominium" fees, but also personal expenses for food, leisure and mobility. In the following, we will give you an overview of the common positions in these areas.

Housing costs - "Condominium fees"

If you are looking to buy a property in the Algarve, keep in mind that while "condominium" fees provide extra convenience, they also increase the monthly cost. If you decide to buy a property in a larger residential building or tourist complex, you will usually have to pay so-called "Condomínium" contributions. These cover the maintenance of communal facilities such as elevators, pools, gardens and other services such as internet use. The amount of these costs varies greatly, depending on amenities and the size of your own property. While the costs in municipal buildings with a relatively large number of residential units and without a pool are sometimes between €25 - €70 per month, you can expect between €80 - €120 per month for a 2-bedroom apartment in a complex with a pool and small green areas, for example. More spacious residential complexes with a variety of amenities such as different, partly heated, pools, tennis courts, gardens, reception can cost several hundred euros per month.

Electricity and energy costs

Electricity costs vary depending on your individual consumption and the equipment of your property. Air conditioning, electric underfloor heating and hot water preparation by instantaneous water heaters or boilers are typical "electricity consumers" and thus cost factors. Depending on how often they are used, electricity bills can vary. In the summer months, when air conditioners are used frequently, costs tend to rise. The basic fee on the part of the electricity provider also varies depending on the maximum power provided.

Invest in energy-efficient appliances and pay attention to sustainable energy solutions. Solar energy is widely available in the Algarve and is a long-term viable option that can reduce electricity costs.

Water costs

Water is relatively cheap in the Algarve compared to many other European countries. A household of two people without a pool and garden pays an average of about €20 per month for water. Nevertheless, consumption can vary depending on the household and use of pools or garden irrigation.

If you have a large garden or pool, it may make sense to think about installing a water collection system or automated irrigation to save costs while protecting the environment.

Lifestyle and hobbies

As in any country, the cost of living in the Algarve depends heavily on your lifestyle. Leisure activities such as golf, a popular sport in the region, can be quite costly. On the other hand, there are also many affordable activities, such as hiking along the coast or discovering the charming villages.

Groceries and eating out

The cost of food in the Algarve is moderate by European standards. Fresh fruit, vegetables and meat are often cheaper than in Central Europe, while international branded products can be a bit more expensive. You can also save money when going out to eat. Local restaurants and cafes allow you to enjoy fresh and delicious food for little money, while upscale eateries or beachfront eateries with ocean views charge higher prices. Take advantage of the local markets: here you can find fresh and seasonal products at good prices while supporting the local economy.

Services such as a visit to the hairdresser, taxi rides or laundry are also cheaper due to the lower wages on average.

Gasoline prices

Petrol prices in the Algarve are in line with the European average. If you travel a lot, for example to explore the coast or drive inland, you should also plan for these costs. Again, it is worth comparing prices regularly, as they can vary depending on the gas station.

Public transport such as buses are comparatively cheap, as are driving services such as taxis and Uber.

School fees (private schools)

If you are moving to the Algarve with your family, you could consider the cost of international or private schools, although this is not a mandatory expense. The Portuguese public school system is considered solid and is a good alternative for many families. However, if you value an international education, the Algarve offers a wide range of educational opportunities, with a total of 14 international schools teaching children aged 3 to 18. The languages of instruction range from English and Portuguese to German and Dutch, giving you a wide range of choices. School fees usually range from €6,000 to €18,000 per child per year, depending on the school and the level of education.

Healthcare costs

Portugal has a well-developed healthcare system that is relatively affordable by European standards. As a resident, you have access to the public healthcare system, which offers a wide range of treatments at a moderate cost. In addition, private health services are available, which are usually cheaper than in many countries in Northern Europe. Getting private health insurance can be worthwhile, as it is often cheaper in the Algarve and gives you access to faster medical care as well as extended services.

Mobile phone contracts

The cost of mobile phone contracts in the Algarve is moderate by European standards. There are several providers in Portugal, including MEO, NOS, NOWO and Vodafone, which offer different tariffs for mobile and mobile internet. Depending on your needs, you can choose between prepaid or contract models. A typical mobile contract with data volume of around 5-10 GB, unlimited calls and SMS costs between €10 and €30 per month. Those who use mobile Internet more can choose tariffs with higher data volumes or even unlimited data, which are correspondingly more expensive.

Summary of the costs of daily life in the Algarve

To give a clear overview of the costs of daily life in the Algarve, we have summarized the most important expenses:

Cheaper and more expensive cities along the Algarve

If you value a cheap life, the east of the Algarve or the interior could be a better choice. On the other hand, those who would like to live in a lively, touristic centre must expect higher costs.

Cheaper cities include, for example, Olhão, São Brás de Alportel and Monchique, with rents ranging from €450 - €800 for a 1-bedroom apartment. They offer a more authentic and tranquil life with a lower cost of living. More expensive cities such as Lagos, Faro, Albufeira and Vilamoura, with rents between €800 - €1,500 for a 1-bedroom apartment, attract higher rents and living costs due to their tourist infrastructure, beautiful beaches and international connections.

Also feel free to check out our blog post "The best places to buy property in the Algarve: Which location suits me? Your comprehensive guide from east to west". Here you can find out which location meets your expectations and what special features the different regions offer. I also recommend our article "Real estate in Portugal's Algarve: Prices and popular regions for buyers at a glance" to get an insight into the current property prices and the most sought-after areas for buyers. This will help you find the right property that meets your wishes and budget.

Conclusion: Is life in the Algarve expensive?

While the Algarve is more expensive than rural regions in Portugal, it's still cheaper than cities like Lisbon or Porto. The quality of life is high here, mainly thanks to the pleasant climate, beautiful beaches and relaxed atmosphere.

If you are interested in moving to the Algarve or would like to find out about property offers, do not hesitate to contact us. We will be happy to help you find the right home in this beautiful region!