2024 Q3 Market Update

 

 2024 Q3 Market Update

 

We hope you enjoy the article. For more information on the market, property values or what is currently on the market, don't hesitate to get in touch with our specialists! 

 

Luxury Property Market in Central Algarve 

As we enter the final quarter of 2024, the luxury property market in Central Algarve remains robust, with sustained demand driving growth in key areas such as Loulé, Quinta do Lago, and Vale do Lobo. Despite global political uncertainties, the region's real estate sector is thriving, buoyed by international interest, limited supply, and strategic developments.

 

Market Performance and Trends

The luxury property market in the Algarve has seen an 18% increase in sales year-to-date (YTD), with average property prices rising by 10%. Prime locations such as Quinta do Lago and Vale do Lobo are leading the charge, with prices well exceeding €10,000 per square meter. Properties in these areas are selling faster than ever, with an average market time of just 45 days, reflecting heightened demand.

British and Irish buyers still dominate the luxury market, accounting for 65% of purchases. However, the region is becoming increasingly international, with buyers from 14 different countries making up the remaining 35%. Notably, there has been a significant rise in interest from the USA, with American buyers becoming a prominent new group of investors.

In response to this demand, several high-end developments are currently underway, supported by international investment funds. While interest in these projects remains strong, buyers are price-sensitive and discerning, expecting premium locations and value for their investment.

 

 

QP Savills Performance

At QP Savills, we have seen a significant uptick in activity. Our leads are up 29%, and year-to-date sales volume has surged by 56%, reaching €196 million. The number of transactions has also risen by 72%, reflecting both strong demand and our ability to deliver exceptional service to our clients.

 

Price Trends

Property prices in Quinta do Lago and Vale do Lobo continue to appreciate, with average villa prices now hovering around €11,000 per square metre and even reaching over €30,000 per square metre for prime properties. This upward trajectory has surpassed even vendor expectations. While the number of properties on the market has increased slightly, the surge in buyer interest means that demand continues to outpace supply, leaving little room for price negotiation.

In surrounding areas of the Central Algarve, prices have risen to around €5,000 to €6,000 per square metre depending on location, age and style. As values within the resorts rise, more buyers are turning to these quieter areas, where properties often come with more land and offer easy access to the bustling coastal regions. The increased demand in these locations is also driving prices upwards.

 

 

Shifts in Buyer Motivations

We are seeing a growing number of young families relocating to the Algarve. For these buyers, proximity to international schools and urban centres is key, allowing for both a high quality of life and greater independence for their children. Long gone are the days when the Algarve was mainly attracting retiring golfers - although world-class golf remains a huge draw.

Retirement planning on the other hand is a strong motivator for many buyers today. A significant portion of our clients are purchasing homes now with plans to retire in the Algarve at a later date. In the meantime, they are choosing to rent out their properties, ensuring they don’t miss out on current market opportunities.

In addition, the Algarve is becoming increasingly popular among digital nomads, who are adding a new dimension to the property market. These remote workers are drawn to the region for its reliable high-speed internet, excellent quality of life, and favourable climate. With Portugal ranking highly in Savills recent study on prime destinations for digital nomads, both Lisbon and the Algarve are attracting this growing demographic. Many are looking for properties with easy access to international airports and local amenities, while also offering a tranquil environment for remote work. This trend is contributing to rising demand, especially for homes in quieter areas that offer both connectivity and lifestyle appeal.

A notable rise in interest from American buyers is already underway, Americans, buoyed by a strong dollar, are starting to invest in Algarve property, which is likely to push prices even higher. Canadian buyers are also expected to increase their presence in the market, driven by recent capital gains tax hikes in their home country.

 

 

New Developments

The influx of international funds has intensified, with developers focusing on sustainable, high-quality construction to meet the expectations of discerning buyers. Several fantastic new developments are either under construction or in the planning stages, offering a wealth of options for investors. We are seeing a surge in enquiries from developers seeking consultancy, eager to tap into the Algarve’s flourishing property market. As a result, we are expanding our New Homes team to better serve both buyers and developers, ensuring we continue to offer the highest level of service.

Earlier in the summer we launched the new Atlantic Pines Residences - an exclusive instruction we received from Draycott. Beautifully located within the Vale do Lobo area, this development was met with extraordinary interest and, within the first 10 days of sales, we secured 21 sales out of a total of 28 villas.

 

 

Future Outlook

We are optimistic about the future of the Algarve's luxury property market.

The changing tax environment in the UK is already encouraging many wealthy individuals to consider relocating, and Portugal's favourable tax regimes only add to the appeal of its enviable lifestyle.

American investors already make up a significant portion of new buyers, and with United Airlines announcing four direct flights per week between Newark and Faro from May 2025, we expect this trend to grow.

So, demand from existing markets increases year on year and, with these new markets coming into the mix, we see momentum only going in one direction. This is fueling our drive to grow our team, open new office locations (not only in the Algarve) and expand into rentals and property management.

The future looks bright here in Portugal!

 

Stay tuned for the latest updates in our News & Events section!

 

Alison & Kerstin
Co-Owners, Directors and Sisters
info@qp.pt | +351 289 396 073 | qp.pt