The Algarve has everything going for it in terms of investment in real estate. Plenty of sun. Little rain. Stunning beaches, lovely nature reserves, breath-taking scenery, golf courses in spectacular locations, historical villas and large cities. And there is more, such as safety and quality of life, an international airport in Faro, and a motorway which brings the whole region closer together. As you can see, there is no shortage of good reasons to invest in real estate in the Algarve.
What is the best spot to invest in real estate in the Algarve?
The choice basically depends on your personal tastes – do you prefer the peace and quiet of the hills and fields, or the bustle of cities and beaches?
Another important factor which can help you make up your mind is the price of housing. The value of the real estate in this region varies greatly, based on how close one is to the coast. The prices also vary depending on the availability of golf courses in the neighbourhood. According to the Portuguese Statistics Office, prices in 2020 varied between 599 euros per metre squared in Alcoutim to 2,268 euros per meter squared in Loulé. These figures are based on the evaluation of the real estate by the tax office, which tends to be lower than the market value. For example, regarding Loulé, real estate listings on websites such as Idealista showed an average price of 3,157 euros for actual purchases, well over the reference of 2,268 given by the tax office.
The most expensive locations
The city of Loulé has the highest price per square meter. This city includes some of the most glamorous beaches in the Algarve: Quinta do Lago, Ancão and Vale do Lobo, plus the famous Vilamoura Marina, a must for Algarve nightlife in the summer. The golf courses in Vilamoura, Vale do Lobo and Quinta do Lago are also worth mentioning and have greatly contributed to the economic development of the region.
Average price of real estate per sqm: 2,268 euros
Price variation in 2020: 8,9%
The second most expensive spot for investing in real estate in the Algarve is Albufeira. With the ever-present ocean, the beautiful beaches and bustling summer life are some of its strongest characteristics. Located just 40 km from Faro, Albufeira is home to the famous Olhos de Água, Salgados and Pescadores beaches.
Average price of real estate per sqm : 2,026 euros
Price variation in 2020: 5,8%
Lagos is home to the third highest prices of real estate in the Algarve, according to official figures. In recent years, the whole of the region of Lagos has undergone extensive economic development. The city itself is cosmopolitan and faces the ocean. It is dynamic, growing, has commerce and boasts good services.
Average price of real estate per sqm: 2.016 euros
Price variation in 2020: 4,8%
The cheapest locations
Alcoutim is the municipality with the lowest prices in terms of real estate in the Algarve and the only one in which housing prices decreased in recent years. It is situated quite far from the coast, but it does have very beautiful fresh water beaches, such as the Pego Fundo.
Average price of real estate per sqm: 732 euros
Price variation in 2020: -19,1%
Monchique is the second cheapest place in the Algarve for investing in real estate. Situated on the hill from which it gets its name, it is known as the “Garden of the Algarve”. It is famous for its thermal baths – the Caldas de Monchique – and is particularly sought after by people who enjoy relaxing with nature.
Average price of real estate per sqm: 732 euros
Price variation in 2018: 21,8%
São Brás de Alportel ranks third in terms of most accessible prices of real estate in the Algarve. Near Faro, and just 18 km from the airport, São Brás de Alportel combines the benefits of being in a natural and mountainous region with the fact that it is relatively close to lovely Atlantic beaches. It is also an important centre for the cork industry, which makes it even more interesting.
Average price of real estate per sqm: 1.226 euros
Price variation in 2020: 4,9%
Average price of real estate per municipality
| Municipality | Average price of real estate (€/sqm) | Annual variation (2019-2020) | |
| Loulé | 2.286 | 8,9% | |
| Lagos | 2.016 | 4,8% | |
| Albufeira | 2.026 | 5,8% | |
| Tavira | 1.963 | 8,6% | |
| Algarve | 1.771 | 7% | |
| Lagoa | 1.823 | 12,1% | |
| Vila do Bispo | 1.545 | 4,6% | |
| Vila Real de Santo António | 1.697 | 7,8% | |
| Portimão | 1.627 | 11,2% | |
| Aljezur | 1.668 | 7,8% | |
| Castro Marim | 1.470 | 5% | |
| Faro | 1.752 | 9,5% | |
| Silves | 1.505 | 0,06% | |
| Olhão | 1.367 | 0,4% | |
| São Brás de Alportel | 1.226 | 4,9% | |
| Alcoutim | 599 | -19,1% | |
| Monchique | 655 | 732 | 28,1% |
Source: INE. Average value per sqm, in 2020.
