Is it time to revisit old friends in the Algarve?


Algarve is one of the more affluent places in Portugal

The Algarve is no stranger to many property investors around the world with the UK market especially in the middle of a long term love affair with the region. As well as property investors it has also been one of the prime locations in Europe for a holiday home but the last year has seen the area fall out of favour a little.  Is this a short term blip or the start of a trend away from the more traditional property investment areas of yesteryear?

For those who are about to, or maybe already have, crossed the Algarve off their list of possible places to invest, think again.  This is a vibrant area of Portugal and one which has an amazing ability of being able to reinvent itself time and time again to attract a new group of property investors while still retain the more traditional UK sun, sea and second home property investors.

So what is so good about the Algarve that makes people return time and time again, often picking up holiday homes and choosing to spend their later years there? What is so special about it now and what will happen in the future?

Property market

Since the revision of planning laws in Portugal in 1993, a move which meant that new builds and revisions to older properties had to fit in with the character of the area, prices in the country have risen by between fifteen and twenty percent a year for the last 15 years.  This has seen a lot of people make a lot of money and prompted many changes throughout that time.  While it is one of the more expensive areas in Portugal and a lot more expensive than other property investor favourites such as Spain, they still keep coming back for more.  But why?

Tourist services

The authorities in the Algarve quickly learnt that in order to attract long term visitors to the region they would need to refine the area, the services and place the emphasis on the tourist trade while retaining the old style feel and beauty of the traditional Algarve.  They have managed to pull this trick off time and time again by being able to move with the times and give people what they wanted, services and entertainment at a price which offers value for money.


While many sports come and go in the world of fashionable trends, golf and the Algarve still go together like some of the best double acts, such as Morecambe and Wise, the two Ronnies and Fred and Ginger.  They both hit off each other and together they continue to attract upwards of 5 million visitors a year.

The facilities are second to none, the tournaments are first class and there are more than enough courses to ensure that you have your hands full for a short stay.  But that is not all that the Algarve has to offer with another sport about to take centre stage.

Motor racing

This is the new weapon of the Algarve tourist board, the new magnet for the tourist trade and the food for the property investment market.  Yes, Portugal, or to be specific the Algarve, is in the process of building its very own top of the range racing track with so much more to offer than just racing

The new Algarve International Motor Racing Circuit is situated in Portimao on Portugal’s southern coast and is forecast to attract a minimum of 1 million extra visitors to the area each year.  However, this is where the fun and games start because this is no ordinary racing track, this racing masterpiece has a track which can change into any one of 64 different configurations.  It can host bikes, cars, go karts and the cherry on the top, F1 motor racing and there is much planned for the future.

So what about the future?

There are high hopes that the new racing track will be able to host an F1 race very soon, something which is sure to put the Algarve on the map and increase awareness of the area.  However, in the short term we have seen a marked increase in the number of properties for sale, a reduction in the average property price and an increase in the average sale time from around six months to ten months.

At the moment, in line with many other European countries, Portugal is going through something of a lean time on the economic front.  The financial sector is struggling, the cost of living has never been higher and more importantly there has been a marked reduction in the number of tourists visiting areas such as the Algarve.

As the Algarve depends almost one hundred percent on the tourist trade the area has been hit harder than many other areas of Portugal.  However, while the number of homes for sale has increased of late those who are calling the death of the Algarve may be a little premature.  True, the local economy has seen better days, the region is not seeing as many overseas visitors and buyers in the property market have all but dried up for now.  So why would you even look at the area?

The truth is that the Algarve has and always will have a special place in the hearts of investors such as those in the UK but this is not blind faith.  The Algarve local authorities have shown themselves to be very proactive and very forward thinking in their approach to the area and what tourists want to see.  The racing track is the latest example of this skill and rather than replace older attractions such as the golf courses they have found a way of adding to existing facilities while retaining older visitors.


The King is dead, long live the King – the Algarve is certainly not dead and those who suggest otherwise may receive a shock when the worldwide economic slowdown starts to turn.  The beauty is that it is not only the Algarve which had been attracting interest, prior to the slowdown, but surrounding areas as well.

The attractions of the Algarve have been enhanced of late although many are waiting for the property investment scene to realise this!


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