With an increasing demand for high-end properties in the Algarve, real estate agencies are on the hunt for new luxurious homes to quench international buyers’ ever-growing thirst
Few are the industries that thrived over the last 18 months. Online retail certainly did, as Amazon boss, Jeff Bezos proved by becoming the World’s richest man and flying off into outer space. So did Luxury Real Estate. Whilst buyers couldn’t physically travel to visit potential homes, they were able to visit them virtually and close long-distance deals thanks to ever-improving new technologies.
Technology is one of the key reasons why the premium properties market kept growing at a steady pace. Real estate agencies invested in their online presence with better sites and online marketing campaigns and improved their virtual touring skills for affluent buyers whose purchasing power was not affected by the pandemic.
With sales figures of €139.7 million so far this year, leading luxury property agents QP Savills invested in their online strategy. “We invested heavily in our marketing and analytics to ensure as much success as possible with the website,” explains Lisa Channing, marketing manager for the agency. “We have in-house SEO [Search Engine Optimization] specialists to achieve the best exposure for our clients’ properties and have seen an 84% increase in visits to our website this year compared to last year. The past three years have just been phenomenal.”
So phenomenal, in fact, that there are not enough houses in the prime property category to satisfy the demand, which means that prices keep creeping up. Several factors have driven this trend. First of all, by the two tax schemes, the Portuguese government put in place to attract foreign investment: the Non-Habitual Residents scheme and the Golden Visa, which is coming to an end in cities and on the coast on January 1, 2022, causing a real rush, attracting buyers from around the globe. And then, by Brexit and COVID, which have pushed more foreigners to turn to the Portuguese market. According to Wilfrid Hoos, managing partner at Engel & Volkers in Portimão, the greatest attraction is “its excellent cost/benefit ratio, which is still reasonable compared with other countries. Even though it is rising, the price per square meter is still below places like the Côte d’Azur or Mallorca”.
Still, prices are inflating. “We have had a couple of highly-priced properties in our portfolio for two or three years, and they are now all gone, because the price is right and interest is high,” says Wilfrid. With more than 150 properties in the €1.5 million and above price range across the Algarve, Engel & Volkers are also thriving. The Portimão agency alone has witnessed a 130% increase in the first seven months of 2021 compared to last year.
In Albufeira, Robert Edwards, director and partner at Cerro Novo Properties, has also witnessed a constant flow of enquiries. “Summer is rarely quiet, but right now, we are flat out.” Only the offer is not keeping up: “We are not getting properties fast enough,” he claims. “And as for construction projects, it can take up to two years to get one finished.”
His agency’s premium listings currently include a superb traditional villa at Praia do Evaristo, going for €4.2 million. Built on one hectare of land, this fabulous five-bedroom property offers majestic coastal views, magnificent living rooms, mature gardens with a pool and tennis court and a separate guest annexe. And, in a more contemporary style, a distinctive villa of 552 square metres, in an elevated position with a superb infinity pool, extensive gardens, four suites and gymnasium, on the market for €3.250.000.
This type of sea-view property is still the most sought-after. With environmental laws limiting the amount of construction along the coast, offer is scarce and prices steep. Newbuild frontline villas with sea views, such as one in Vale da Pinta listed with Engel & Volkers, are hard to come by these days. In its final stage of construction, at €3.650.000, it includes four spacious suites with terraces, a garage for three cars, a sauna, a wine cellar, and two multipurpose areas with potential for a cinema room, gym, or a studio.
With such little offer, buying a plot is a good alternative is, such as a 5.5ha property with an approved project for a villa near Ferragudo. Upon completion, it will offer seven bedrooms, eight bathrooms and a covered parking space for at least six cars, for €5.500.000. Surrounded by an extensive green area, just a short walk from the beach, it is just what buyers are looking for: more space.
In the Golden Triangle, where we find the Algarve’s most opulent properties, QP Savills currently have the ultimate luxury listing: a state-of-the-art eight-bedroom property on the market for over €15 million. In addition to its expansive glass walls, artwork, and designer lighting, the 1,500sqm mansion has two heated outdoor swimming pools, an indoor swimming pool, cinema room, games room, gym, and spa.
On the opposite side of the Algarve, Fine & Country Carvoeiro’s most extravagant listing comes in at just over €10 million; a newly built 800sqm villa, right on the clifftop, with a plot of around 20.000sqm. “An absolutely unique property,” remarks Zoie Hawker, managing partner of the agency. Properties of this level are very rare in Carvoeiro, where the UK is still the most significant market — around 30% of clients. However, Fine & Country has sold to high-end clients from 29 countries in the last two years, including Hong Kong and the Middle East. These discerning buyers look for new builds or recent constructions, expecting the highest quality. In addition to an indoor pool and spa areas complete with a sauna, steam room and jacuzzi, they are now looking for luxury features such as a wine cellar or padel court.
People are changing their lifestyle, realising they can work from anywhere. Many are now buying full-time homes and are prepared to make bigger investments. This change of lifestyle has also created more interest in countryside properties, with bigger plots of land. Estate agents such as QP Savills have picked up on this trend and opened an office in Loulé. Here, the more traditional style is still in demand, such as a grand private estate with spacious living areas, eight bedrooms, a cinema room, library, wine cellar, spa, and tennis court, on the market for €7.950.000.
Another trend is obviously sustainability. Prime properties are being built with the future in mind, such as the L&N Residencies, exclusively listed with Fine & Country Carvoeiro. These are four identical clifftop villas near completion, two of which have already been sold. The 400sqm, each with a private pool and interconnected by an underground tunnel leading to a car park area with space for home cinemas or spas, are hyper-insulated and intelligent homes.
As for predictions for the future, Zoie Hawker says she does not see prices coming down. “But we can see some softening in the market. We are starting to see a lot of Brits putting their properties on the market, which could help slow down the current growth.”