With prices generally lower than the rest of the region, the eastern Algarve real estate market keeps on growing
The calm and tranquillity provided by a house in the eastern Algarve does not come with the typically more expensive price tag of a property in the rest of the region, but those seeking something in the luxury segment in the east have their work cut out for them. The offer in this niche is still scarce, but it is expected to grow, particularly to satisfy the needs of a growing market — according to some of the leading estate agents in the eastern Algarve that Essential spoke to.
“There has been a migratory flow from west to east, especially from clients looking for direct access to the beach and less noise,” assures Artur Cardoso, founder of Casas do Sotavento, which is based in Vila Real de Santo António (VRSA) but operates all over Portugal. “Demand has also increased from European pensioners, for fiscal reasons,” says the agent, who has worked in the sector for 18 years.
However, the growing demand for the eastern Algarve did not come from clients alone. According to Patrícia Alexandre, co-owner and manager of Algar Vila, in Tavira, “the real estate market in the east has evolved a lot in the last few years […]. I recall that, in 2000, there were only a few agencies that had a website or used email, and all the communication between the agency and client was mostly through letters or fax. Now, easy access to new technologies to promote properties in national and international pages has clearly helped increase demand.”
Regarding the type of buyer, most estate agents highlight the foreign market, older and with their own capitals as the main source of transactions. “The main clients are French, Italian, Swedish and Portuguese,” says Artur Cardoso. The manager of Algar Vila also adds the British — “Despite the uncertainty about Brexit, they are still on the market, on a small scale.” — the Belgian, the Dutch, the Polish, Norwegians, and Americans.
According to Patrícia Alexandre, over the last two years, the Portuguese have been matching the profile of buyers, although the agent points out that, in 19 years of experience in this sector, she has only had four national buyers. “Our clients’ profile is classified as ‘cash buyer’, the percentage that uses bank credit is very low and most properties are second homes,” she adds.
In VRSA, Daniel Santos, founder of DME Real Estate, says that aside from foreign buyers, his main market are Portuguese emigrants “who have returned to Portugal and want to buy a house for the seasons.” For the estate agent, who recently opened his second agency in his hometown of Azeitão, “most of these buyers is preparing for retirement.” Santos also notes a growing disinterest from the British market in comparison to others, such as French, Italian and Spanish. “Four years ago there was a lot of demand, now they are a very small percentage,” he admits.
The different answers from estate agents also highlights the specificities of the many local markets in the eastern Algarve. Daniel Santos explains that Monte Gordo and Tavira are traditionally more expensive and with more tourism potential (for now) than VRSA, much like Altura and Praia Verde — areas that hold the great majority of the luxury real estate in the east. Perhaps because of that, the agent stresses that 80% of his buyers in VRSA seek two- or three-bedroom apartments somewhere in the range of €100,000 to €180,000. There is also a smaller slice of potential owners that look for houses between €180,000 and €240,000.
“It’s a very cyclical market, and the demand for properties and location changes from one year to the next. Overall, clients want to be close to cities and towns or even in the centres,” says Patrícia Alexandre. “Properties vary from contemporary to traditional Algarvean, from ancient homes, apartments and villas, they all share positive aspects such as luminosity, good outdoor spaces, living areas and views (especially sea views) and easy access,” she describes. Price- wise, most sales fall somewhere between €180,000 and €400,000.
For his part, the founder of Casas do Sotavento explains that buyers look for apartments, villas and plots with approved projects, mainly between €100,000 and €350,000. Praia Verde; Monte Rei Golf & Country Club, in Vila nova de Cacela; the first beach frontline in Monte Gordo; and Manta Rota receive most of the high-segment offers in the area. As an example, Artur Cardoso references a five-bedroom villa in Praia Verde for under €950,000 — a rustic-style home, with plenty of space and woodwork from the 18th century.
Previously owned homes actually make up the bulk of the property portfolio in the east, according to Daniel Santos. “There is not a lot to see, and when there is, it sells quickly. We have a shortage of remodelled houses. When an investor decides to build something new or to refurbish a building, it is all sold before it’s built.”
Regarding the luxury market in the eastern Algarve, the founder of DME Real Estate describes it as “scarce.” Properties such as the spacious six- bedroom villa — over 1,300sqm of floor space — that his agency has for sale at Praia Verde, with pool and unimpeded views towards the sea, are rare. As is the €2 million price tag.
When spacious areas and good location are combined with sea views and the novelty factor, properties become even more desirable. Such is the case of the three-floor villa that Algar Villa has for sale in Tavira for €1.1 million, and which was fully refurbished in 2017. “This property combines some of the features previously mentioned: positioned in the town centre, good outdoor areas, a traditional Algarve design, sea views, and located within an urban hub with easy walking access to all services,” explains Patrícia Alexandre.
Although these properties are out of reach for the average Portuguese, they are a “bargain” when compared to the prices of houses located in premium areas in the western and central Algarve, which can go up to several million euros. However, it is not just the price buyers are interested in: “Clients say they find the true Algarve in the east,” says Artur Cardoso. “The clients that seek out the eastern Algarve believe we haven’t yet lost our ‘identity’, that we have preserved our traditional Algarvean style and the environmental-protection area that restricts mass construction near the coastal area. Safety, quiet and charm are some of the factors that influence the clients’ choice to invest in the east to buy a second or first home,” states the co-owner of Algar Vila.
“People come to the eastern Algarve for the climate, the nature it still offers, with vast, undiscovered areas, and the warm water,” explains Daniel Santos. Add to that an attractive price and it is easy to understand why this market keeps on growing. It remains to be seen how long it will stay a well-kept secret.