Country Guides Country Guide: Portugal

Date Published:

02/06/2008

Portugal is the western half of the Iberian Peninsula, butted up to Spain and facing the Atlantic Ocean. Once considered the poorer neighbour, these days in many ways it is the more distinguished partner, largely thanks to several prestigious golf developments, including Vale do Lobo and Vila Sol on its southern coast, the Algarve, but also because of its relatively cheap cost of living and 300-plus days of sunshine every year.

By Gordon Miller

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Property Market

Portugal is an evergreen in the overseas property market. Build quality is high, property prices have grown a steady 10-15 per cent per annum since the millennium, and there's a broad choice of property across the price range and country. Depending on what you are looking for the Algarve has its established areas with mature resorts, including Lagos, Vilamoura and Albufeira, each appealing to a different type of person and budget.

Apartments for £70,000 can be found in the central Algarve; £50,000 will buy you a studio in the eastern Algarve near the up and coming resort of Tavira; elsewhere £1million villas are at the cheaper end of the price range at Vale do Lobo, the most upmarket golf development on the Algarve. In fact, golf is probably what the Algarve is best known for and it has several championship quality courses to back up its claim as the number one golfing destination worldwide.

Golf's huge and growing popularity is a main factor in Portugal's continued strong capital appreciation that is well into double figures annually, notes Justyn Medd of agents European Villa Solutions (www.europeanvillasolutions.co.uk). 'Rental yields can reach 10 per cent in the best performing areas, he says. 'I'm confident we will be offering golf projects this year that will achieve strong 10 per cent-plus capital appreciation, and near double-figure rental returns'

'Portugal is convenient and highly thought of, with areas in the centre and north that are opening up.' The areas that Medd refers to are a stretch of the Atlantic known as the Silver Coast or Lisbon Coast, and also called Oeste. Labelled 'the real Portugal', its tourism industry is not yet as developed as that on the Algarve, but it does have many great beaches, atmospheric towns and villages, and properties priced significantly less than similar examples on the south coast. At Praia D'El Rey, an environmentally conscious, low-rise development, built with less than half the density of many complexes on the Algarve, prices start from £100,000.

Further north along the coast, up towards Porto, the country's second city, and beyond, the Costa Verde is attracting increasing interest from British buyers. Bordering Galicia in northern Spain, the scenery is stunning and verdant, the prices the cheapest in the country. £30,000 buys a farmhouse in the interior in need of modernisation; on the coast the same figure will buy you an apartment. The only draw back is that this part of Portugal can be showery in summer and very rainy in winter.