Real estate in Portugal's Algarve: Prices and popular regions for buyers at a glance

Are you thinking about buying a property in the Algarve?

For several years now, the Algarve in the south of Portugal has not only been attracting more and more tourists from all over the world, but has also become increasingly popular with property buyers who dream of a home in one of the beautiful coastal towns. In addition to the mild climate, stunning beaches, a variety of hours of sunshine and a particularly hospitable environment, the Algarve offers an attractive place for those who value a decelerated lifestyle in an idyllic setting. With a wide variety of property listings, from traditional Portuguese homes to modern luxury properties, the Algarve has something for all tastes and different budgets.

In this blog post, we'll take a closer look at the different regions along the Algarve, analyse property prices and identify the most popular places for potential property buyers.

Real estate prices and floor area calculations

However, before we dive into each region, it is important to understand the different factors that influence property prices in the Algarve. When we talk about the prices per square meter, it should be noted that the legal basis for calculation varies in the different countries of the EU.
In Portugal, there are two common indications when talking about areas in residential real estate.
On the one hand, this is the "gross floor area", which is the total area, which is determined by the outer perimeter of the walls and includes private enclosed balconies. It does not include areas that are not suitable for living such as garden and outdoor areas, storage rooms and parking spaces. In Portugal, this gross area is usually also used to calculate prices per square metre and is also used to calculate the annual property tax.
Then there is the "net area", which describes the actual usable living space of the property. In Germany, for example, the net living space is used to determine the price per square metre, in which sloping ceilings and balconies / terraces are taken into account as a percentage.
As a result, when property prices in Portugal are already quite high in absolute terms, one has the impression that prices per square metre are relatively low. This is due to the differences in the basis of calculation.

Cheap vs. expensive regions

Property prices in the Algarve have generally risen in recent years, especially in the popular seafront coastal regions. Over the last year, the average price increase in the Algarve region as a whole has been just under 8%. The average price per square metre in the Algarve was €3,300 in March 2024, making it the most expensive region in Portugal after the Lisbon region, at around €4,000 per square metre. In central Portugal, however, properties can also be found at prices starting from €700 per square metre.
Seen over Portugal as a whole, this results in an average price per square metre of approx. €2,600. In recent years since 2016, there has been a price increase of at least 5% per year every year with peak values in 2018/2019 of over 15%.

Various factors influence property prices in the Algarve, including location, amenities and demand. The proximity to the beach, sea views and access to amenities such as golf courses, restaurants and shopping play a crucial role in this. Modernized or as-new properties with high-quality materials usually fetch significantly higher prices. The development of new infrastructure projects and current trends can also influence demand and therefore prices, whether it is the popularity of holiday properties or the attraction as a place to retire.

In the next sections, we will take a closer look at the different regions in the Algarve and find out which places are particularly in demand and what prices to expect there.

For ease of representation, we have divided the Algarve into three parts, starting with the west and ending with the eastern part of the Algarve.

The West of the Algarve

The western and central part of the Algarve tend to have slightly higher prices than the eastern part bordering Spain. Let's start in the West:
The Vila do Bispo region includes the municipalities of Sagres, Budens and Salema, among others.
This is the ideal location for nature lovers, surfers and those who like it a little more relaxed and natural.
Many of you are probably familiar with the popular "Bordeira Beach" near Aljezur.
You will find spectacular cliffs, culture through the impressive fortress in Sagres, as well as many detached houses with pretty gardens. The style here is less modern and more classic, traditional Portuguese architecture.

Now let's come to Lagos: Lagos is certainly one of the most popular and beautiful cities in the Algarve and attracts with many leisure activities. The historic city of Lagos boasts a rich history and vibrant culture. The medieval city walls, the churches and the slave market museum bear witness to its past as an important trading centre. There are beautiful old town alleys that invite you to stroll, many restaurants, cafés, a beautiful marina but also miles of sandy beaches as well as beautiful bays in the postcard-worthy rock formations. It thus combines a lively city life and relaxation by the sea. You will find traditional properties as well as modern luxury apartments and houses. There is something for everyone. However, due to the popularity of the beautiful coastal city, property prices are also slightly higher, averaging €3,800 per square metre.

Right next to Lagos is Praia da Luz, also known as Luz, a charming coastal town with a beautiful beach and a relaxed atmosphere, ideal for families and sun seekers. You are also welcome to read our blog post "Praia da Luz: A place to fall in love with on the south coast of Portugal", because Luz has even more to offer.

The dreamy mountain village of Monchique, set amidst lush green countryside, certainly has the most affordable property prices in the West. Monchique is known for its thermal springs and offers numerous hiking opportunities along the hills and valleys. It is rather quiet and a bit secluded here and ideal for those who want to get away from the stress of everyday life. Properties with views of the valley and the mountains, although highly sought after, are very affordable compared to all other places by the sea, with an average of €2,300 per square metre.

In the west of the Algarve there are also the popular and well-known towns of Portimao and Alvor.
Portimao is a lively port city with a large fishing port and a promenade full of cafes and restaurants. The city of Portimao is the largest in the Western Algarve with about 60,000 inhabitants. The nearby beach of Praia da Rocha attracts many visitors in the summer. As one of the few places in the Algarve, the cityscape is characterized by some high-rise buildings, which are rarely found in the previous places. However, the prices for apartments in the city center are a bit cheaper.

We would also like to mention Alvor. Alvor is a charming fishing village with narrow streets and original houses. The River Alvor, provides a picturesque backdrop for walks and boat trips. Despite many tourists in the summer, the place is even more traditional. Along the long sandy beach, a wooden walkway leads through the large nature reserve.

The Central Algarve

The Lagoa region is home to the two popular and charming coastal towns of Ferragudo and Carvoeiro. Here it is a bit more contemplative, but still diverse with narrow and colorful streets, many restaurants and cafés, a fishing port in Ferragudo and Portuguese charm. These places have also enjoyed increasing demand in recent years, which has led to a number of new buildings and increased real estate prices.

Silves is famous for its well-preserved medieval castle and ramparts. The annual Silves Medieval Festival attracts many visitors and immerses the city in a medieval image.
Here you will find a rather urban atmosphere with small alleys and cute houses.
If you walk more towards the coast, you will come to the popular seaside resort of Armacao de Pera with a long sandy beach and a variety of water sports facilities and a long promenade lined with many tall hotels and apartment buildings.

Albufeira is certainly even better known. Next to Lagos, Albufeira is one of the most popular destinations in the Algarve. Here you will find a lively atmosphere, a vibrant nightlife and leisure activities. The historic old town, the beaches and the numerous bars and restaurants make Albufeira a popular destination for holidaymakers and property buyers alike. According to recent data, prices per square metre tend to be higher in places like Lagos and Albufeira, while more affordable options are available in lesser-known places like Tavira and Silves.

The region around or just southwest of Loulé attracts a rather affluent clientele with its exclusive housing options. In particular, the so-called "Golden Triangle", consisting of the most exclusive resorts in Vale do Lobo and Quinta do Lago, characterizes this area and raises property prices significantly. These regions are also known as the "Beverly Hills" of the Algarve and are also known as the "golfer's paradise" as they are home to several first-class golf courses, which are frequented all year round due to the pleasant climate.
In Vale do Lobo and Quinta do Lago you will find beautiful villas with perfectly manicured gardens. The price per square metre in Quinta do Lago was around €9,500 in March.

Vilamoura, another popular destination in this region, also offers an exclusive residential area with high-quality properties and first-class leisure facilities. With several golf courses, one of the largest marinas in the Algarve, world-class restaurants and exclusive shopping, Vilamoura is a magnet for discerning buyers.

Loulé is a charming town known for its Saturday market, among other things. This colourful market is one of the largest and most well-known in the Algarve and attracts both locals and tourists. Here you will find an abundance of local produce, handicrafts and fresh food available for sale. Spread over several streets and squares in the historic old town of Loulé, the market offers a lively ambience. Apart from the market, Loulé also has a pretty old town with cobblestone streets and historical sights such as the Moorish castle and Gothic church. The city also offers a variety of restaurants, cafés and shops that invite you to stroll and linger.

Last but not least, we find Faro in the middle of the Algarve, the capital of the Algarve. Faro has a lively centre and is home to Faro International Airport.
Faro is also a popular destination for culture lovers, with a variety of museums, galleries and cultural events taking place throughout the year. The numerous restaurants, bars and cafés also offer culinary variety. There you can also find one or the other cheaper property.

The East of the Algarve

In the east of the Algarve, property prices are even cheaper in comparison. We would like to highlight the popular towns of Olhão and Tavira.
Olhao is a traditional fishing village known for its authentic fish market. Its proximity to the Ria Formosa, a nature reserve of international importance, makes Olhão a popular destination for nature enthusiasts and birdwatchers. The surrounding villages of Mancarapacho and Fuseta offer a peaceful and idyllic environment that is perfect for relaxation and rejuvenation.

Tavira is a very charming town with a historic old town with narrow streets, traditional buildings and historical sights. The neighbouring town of Santa Luzia, the capital of the octopus ("o capital do polvo"), is also very sympathetic here.

Vila Real de Santo Antonio is located on the border with Spain and offers an attractive combination of wide sandy beaches and a lively city atmosphere. The city is a popular destination for beach lovers and Spain enthusiasts who appreciate the proximity to the neighboring country. The coastal region offers a variety of water sports and leisure activities for the whole family.

Overall, the Algarve offers a variety of opportunities for real estate investment, starting from affordable options in the east, to exclusive luxury villas in the "Golden Triangle" as well as modern city apartments in the west. With its mild climate and beautiful beaches, the Algarve remains one of the most desirable regions for property buyers in Portugal. We are happy to assist you in your search for your dream property in the Algarve. With our wide network, we can help you find the property that suits your needs and budget. Contact us today to make your real estate dreams come true in the beautiful Algarve.

_{*Source of price data: Idealista Price History Report www.idealista.pt}