The Algarve continues to solidify its reputation as one of Portugal’s most attractive regions for property buyers and investors alike. According to the newly released Engel & Völkers Market Report Portugal 2024-2025, areas such as Faro, Lagoa, and Albufeira are seeing remarkable price growth and heightened real estate activity, reaffirming the region’s premium status.
Faro Posts Record-Breaking Price Increase
Faro stands out as the hottest market in the new report, with average selling prices soaring by an impressive 44% in the past year. This remarkable surge underscores not only strengthened demand but also the region’s growing appeal among both domestic and international buyers.
Strong Growth in Lagoa and Albufeira
Close behind Faro, the resort towns of Lagoa and Albufeira also recorded robust price growth of around 20%. Meanwhile, Quinta do Lago, renowned for its luxury properties, witnessed a 19% uptick in home values—maintaining its place as the priciest location in Portugal with average prices reaching €12,793 per square metre.
Diverging Activity Across Algarve Towns
While Lagoa and Lagos have seen a noticeable boost in real estate transactions, other popular Algarve destinations like Vilamoura, Vale do Lobo, Tavira, Portimão, and even Albufeira itself posted modest declines in activity, pointing to a shift in buyer preferences and possibly supply constraints in the most sought-after enclaves.
Foreign Buyers Drive Demand
One of the standout findings of the Engel & Völkers report is the continued dominance of international buyers, who represent over 50% of all real estate transactions in the Algarve. British, Irish, German, Dutch, and American buyers remain at the forefront, attracted by the region’s quality of life, favorable climate, and enticing investment prospects.
Portimão: The Algarve’s Rental Hotspot
When it comes to the rental market, Portimão clinches the title of the most dynamic municipality, with average rents hitting €10.42 per square metre. In contrast, Lagoa registers the lowest activity in the rental segment, highlighting the diversity of Algarve’s property market.
Luxury Market Remains Resilient Despite Scarcity
Margarita Oltra, Regional Manager of Engel & Völkers, emphasizes that these trends showcase the “resilience of the Algarve market.” She adds, “The appreciation recorded in Faro, Lagoa, and Albufeira reflects confidence in the market and the scarcity of premium product available, consolidating the region as a reference in the luxury segment.”
Algarve’s Bright Investment Future
For those monitoring Portugal real estate trends, the Algarve remains a standout location for both homebuyers and investors. With prices rising sharply in key areas and consistent demand from international buyers, the region’s real estate market looks set to continue its dynamic growth.
