The real estate market in the Algarve

Unlike most European countries, Portugal did not experience the real estate bubble of the years 1996-2007. Prices per square meter remained reasonable.


Then, the financial crisis of 2008 heavily impacted the Portuguese real estate market. After a slump in demand and prices, they started rising again in 2014.


During the first half of 2014, 14 billion euros were invested in real estate in Portugal, of which 43% in the Algarve !


The Algarve is successful and sees the arrival of more and more foreigners, especially French. The Franco-Portuguese tax agreements favor this trend. But it is not the only reason. A certain mistrust in the banking system, a low profitability of capital, the fear of terrorist attacks, a tense social climate, all these reasons that push the French to invest or settle in the Algarve, privileged region of Portugal. When you add the assets of the Algarve (Cf. § « Living in the Algarve »), we understand why this region are so appreciated.


The real estate market in the Algarve is currently raised to almost 50% by foreign demand, especially European retirees, who are looking for a better quality of life and an attractive tax system.


Demand increases, prices follow. However, identical products (type of housing and environment) prices remain 30% to 50% cheaper than in France. The market is still seeking, and there are large disparities in prices per square meter. You have to know how to search and take the time to find bargains.

The market for long-term rental

Before considering an installation in the Algarve and investing in real estate, you are more and more likely to want to check your ability to adapt in a new environment, validate your future location, in short, make sure that you make the Good choice.


Thus, the long-term rental option makes sense. But that is not as easy as it seems.


What you need to know about the rental market in the Algarve :


1) The long-term rental market (to be isolated from seasonal rental) has been growing strongly since 2014. The offers are no longer in demand and the market is saturated to date.


2) The regulations are more and more strict and the controls more and more frequent since this year. This discourages unscrupulous backers (who previously had not reported their activity) to leave their goods on the market.


The sales market has also been on the rise since 2015 and demand continues to grow. Buyers are sometimes disoriented about the dilemma facing them : rent to be sure not to go wrong or buy before prices go up.


A compromise could be found with the development of the lease with option to buy.


We are working on this niche to better face the demand.

Sale in the future state of completion (VEFA) in the Algarve

The purchase on project or in phase of construction is back in Algarve.


According to article 1601-3 of the Civil Code:


« The sale in the future state of completion is the contract by which the seller immediately transfers to the purchaser his rights on the ground as well as the ownership of the existing constructions. The future works become the property of the purchaser as and when they are executed. The buyer is obliged to pay the price as the work progresses. The seller retains the powers of the owner until the acceptance of the works. ».


In recent years, demand has outstripped supply. Builders have multiplied construction programs, but do not always face growing demand. In fact, the new products are sold on a project, with completion forecasts of about 18 months.


Sale in the future state of completion is gaining momentum. This is not a new method of purchase, but it has not been used much in recent years in Portugal. Manufacturers are able to produce products of very good quality. But there are always exceptions and vigilance is required.


The principle of the VEFA requires the payment of advances on works, then by phase of realization. Generally, the buyer becomes the owner only upon delivery of the finished product.


For these reasons, and given this growing market that attracts many manufacturers, we recommend caution for this type of operation. It is advisable to take all the necessary precautions on the legal level, in order to secure the acquisition.

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ORPI Faro-Olhão

Praça Patrão Joaquim Lopes, n°34

8700-132 Olhão

+351 289 09 09 80

AMI n.º 15300


Praça Patrão Joaquim Lopes, n°34

8700-132 Olhão

Praça Patrão Joaquim Lopes, n°34

8700-132 Olhão

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