QP Market Report
My sister and business partner Kerstin and I have cause to celebrate: QP Savills, or otherwise known as Quinta Properties had its 25th birthday this year! From our initial team of five people huddled together in a small office located in what used to be the heliport of Quinta do Lago, we have evolved into a thriving team of over 30 experts spanning three offices. We are privileged to work alongside top professionals who all continue to make QP Savills what it is today. But mostly, of course, we are all so fortunate to live and work right here in the Algarve, with its European charm and laid-back lifestyle amidst stunning landscapes – I, like so many, cannot imagine a better place to call home.
So what is happening to the property market so far this year?
Like any other real estate market, the Algarve is not totally immune to the ebb and flow of economic tides. We are experiencing a real shortage of property. Demand on the top end of the market remains high, while we have seen a slight decrease in demand on the lower end. Increased interest rates, coupled with higher living costs across Europe have affected this segment of the market in particular. Building costs have dramatically increased, and so, new properties coming onto the market are naturally priced high. We anticipate the local council will soon introduce stricter local zoning laws (PDM), which could make it challenging to get approval for new construction, especially outside resort areas. Unfortunate for those with land planning to develop, but it will only exacerbate the lack of stock and support higher values for existing properties.
Recent legislative changes affecting NHR (non-habitual tax residency) and the Golden Visa programme have had minimal impact here, as buyers are drawn by the Algarve’s lifestyle, with only 5% of our buyers motivated by visa or tax perks. While the majority of buyers still are from the UK, an increasing interest from North Americans presents a growing market opportunity. With approximately 15% of all foreign buyers in Portugal now coming from the United States, this is an emerging market that holds huge potential. It is a new chapter for the Algarve’s real estate and we believe that numbers will continue to soar.
In general, our property values and prices remain stable, even amid global economic uncertainties. However, the rapid price growth of recent years is likely unsustainable, with an 8% price adjustment in the past year following the substantial increases from 2020 to 2022.
In the last six months, the Algarve has witnessed a surge of new developments and significant investments from real estate heavyweights like Arrow Global, Bondstone, and many others. Developers are incorporating hospitality brands into their projects, even in traditionally less premium areas. The Algarve’s real estate market remains confident and vibrant, in stark contrast to major cities like Lisbon and Porto where the market is cooling off. Pricing in luxury developments like Serenity, One Green Way, voco Formosa Park – Algarve, W Residences, and Ombria Viceroy is high but stable.
With three office locations in Quinta do Lago, Vale do Lobo and Loulé, our team of multinational, multilingual sales and marketing professionals is well placed to support all your property matters.
Here is a brief update from each office:
Jamie Robinson, Sales Director at Headquarters located in Quinta do Lago
“Despite the global market slowdown due to rising interest rates and living costs, our clientele, primarily cash buyers, has shielded us from the impact. A shortage of quality properties continues to drive prices, and demand remains strong from core and new markets. While our primary markets have levelled out after a post-COVID boom, the American markets are filling the gap, keeping overall demand high. Record sales, especially in Quinta do Lago and Vale do Lobo, are driven by limited new properties, higher building costs, and strong demand.
So far, 2023 has seen the highest ever prices, and I’m proud to say that my team sold a handful of record-breaking properties for over €20 million this year! We remain committed to marketing and are well-prepared for new market conditions. We’ve connected with the Savills network in New York, although the Algarve is not yet on the American radar. The Algarve’s lifestyle, cost-effectiveness, outdoor living, security, and friendly Portuguese community make it an attractive destination, and we believe the secret will soon be revealed.”
Ricardo Falé, Resorts and Developments Director, Vale do Lobo Office
“My team and I form the newest branch here at QP Savills and we have been instructed on some handpicked, really exciting new coastal developments. I’m thrilled to join QP Savills in this dynamic landscape where we play a key role. Our deep knowledge of the Algarve market, extensive global network, and exclusive property access make us experts in identifying and promoting new developments. My team aims to help clients make informed investment decisions. One such development is voco Formosa Park – Algarve, offering luxury in a prime location near Ancão Beach, Quinta do Lago, and Vale do Lobo.
QP Savills is committed to excellence, luxury, and customer satisfaction, appealing to discerning clients in the Algarve real estate market. Our efforts strengthen the region’s reputation as a global real estate hotspot and contribute to the Algarve’s growth and prosperity, establishing it as a premier destination for luxury living and real estate investment.
I work in our dedicated office for Resorts and Developments, which is located at the entrance of Vale do Lobo. Please do come in and meet the new team.”
Monica Mendes, Loulé Sales Director
“In the central Algarve, our market remains strong. Buyers are taking their time, looking for value in properties with ready-to-move-in amenities. From traditional charm to modern luxury, we have the team and portfolio to meet their diverse preferences. While prices have held steady, we predict a correction for overvalued properties on the horizon. We have recently been instructed on some incredible new listings. My team and I look forward to welcoming you to our beautiful office located on the Avenida here in central Loulé. Come and have a look!”
Iain Begg, Vale do Lobo Manager
The Vale do Lobo market has seen strong price growth over the last few years driven primarily by strong demand and a lack of supply. Rising interest rates have taken less effect than other markets across Europe due to the strong cash positions of buyers here and the influx of new demand from families moving over to make the Algarve their home. Previously the market was made up of holiday home buyers and retirees but what we’re seeing now is a lot of young families moving out for a better quality of life. I myself am an example of that, having moved with my young family from central London to Portugal a couple of years ago. The local schools have improved dramatically (most of which have waiting lists) and the social scene is year-round. Vale do Lobo is perfect for families moving over due to the high concentration of English-speaking residents, the facilities on offer, and proximity to the beach and schools. We expect the Vale do Lobo market to remain resilient with demand to remain strong, a lack of availability property for sale, and the high cost of rental accommodation.
So in summary, in 2023, our market remains strong, with 95% of our buyers being international, primarily from the UK. The Algarve’s real estate market is a story of resilience, innovation, and enduring appeal. From luxury developments to charming coastal villages, the Algarve continues to captivate property seekers from around the world.
Kerstin and I are proud of our growing team, who specialise in providing the very best service to our clients. We deal with some of the most exciting properties across the coast and with our long-standing association with 700 Savills offices around the world, we are the perfect partners to help you buy or sell your home in the Algarve. The year 2023 was a record year at QP Savills and we are proud to maintain our position as market leaders.
We look foward to seeing you at our offices.
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