Brits Still Largest Buyers of Homes in Algarve Resorts

3 March 2021 – Ana Custódio

During the second half of 2020, British investors accounted for 56% of the acquisitions by international investors in Albufeira-Loulé and 35% in Barlavento.

Confidencial Imobiliário conducted a recent study on the market for resorts in Portugal in partnership with APR – the Portuguese Association of Resorts. APR, whose mission is to contribute to the development and internationalisation of its members and the residential tourism sector in Portugal, also represents thirty of Portugal’s main residential tourism developments.

The study concluded that British investors continue to be the primary driver of international demand for Portuguese resorts, increasing their share in the Algarve, even during the pandemic, which saw a precipitous decline in foreigners’ visits to Portugal.

Alongside the investments in the Algarve, foreign buyers also sought properties on the Atlantic Coast, reaching a 5% share in acquisitions by foreigners. On average, British buyers invested €6,600/m2 in properties purchased in Albufeira-Loulé, according to data from SIR-Resorts.

This movement made Europe the dominant source market for Portuguese residential tourism in all regions, accounting for over 90% in the Algarve and 66% in the Lisbon region. In the period under review, the average value of homes in resorts in Portugal stood at €4,273/m2, compared to the €4,513/m2 in the semester before, which is the highest value of the SIR-Resorts series, which began in 2016.

Albufeira-Loulé, which accounts for almost 50% of the total, saw the average value hold steady semester to semester, reaching 5,325 €/sqm. In the highest range, prices fell from €9,768/m2 to €9,209/m2. However, the area continues to stand out compared to others, with an average resort price between 40% and 62% higher than the other regions in the survey, including the Atlantic Coast, Western Algarve and Eastern Algarve.

According to the Resorts’ House Price Index, the housing price in Residential Tourism developments in Portugal recovered in the second half of 2020, increasing by 5.8% in half-yearly terms. The quarter-on-quarter change in prices in the first half of the year had been -0.4%, a note of stability after the vertiginous fall of 12.7% at the end of the second half of 2019, a period marked by uncertainty over Brexit, which would not take effect until early 2020.

Nevertheless, confidence is not immune to the pandemic and both price and sales expectations are well below those of a year earlier. However, there is a consensus that the pace of sales growth depends on the return of travel, especially from the UK.

Translation: Richard Turner