By Alda Filipe, Director, Real Estate and Marketing, Kronos Homes
Abundant sunshine, stunning beaches and world-class golf courses have long made Portugal’s Algarve region a mecca for tourists, but we at Kronos Homes, which owns and operates the Algarve’s stunning Palmares Ocean Living & Golf, are seeing an increasing number of people looking to commit to the region over the long term.
Recent market trends
The market has been busy of late, with property prices rising almost across the board in the past year. Portugal’s National Statistics Institute (INE-Instituto Nacional de Estatística) reports that 23 of the country’s 25 regions registered year-on-year increases in their median house prices at the end of 2021. Nationally, house prices hit a record median sale value of 1,355 euros/square metre in the fourth quarter of 2021, increasing 9.4 percent over the year. That included increases of 8.7 percent for new builds and 9.6 percent for existing housing stock.
A total of 165,682 homes were sold in Portugal in 2021. That’s the highest annual number in the past five years, according to INE figures.
Overseas buyers
Palmares Ocean Living & Golf, which sits in a natural amphitheatre with spectacular sea views over the estuary of Alvor in Portugal’s Western Algarve, has seen a huge appetite from overseas buyers for its properties during the past year. Nor is it alone in experiencing this intense demand. The number of foreigners living in Portugal jumped by 7.8 percent between the end of 2020 and the end of 2021, according to Foreigners and Borders Service (SEF-Serviço de Estrangeiros e Fronteiras) data, while the Portuguese Chamber of Commerce in the UK has reported a “tidal wave” of people wanting to move from the United Kingdom to Portugal so far in 2022.
Palmares Clubhouse
In the experience of Palmares Ocean Living, demand for second homes is also growing rapidly, both from holidaymakers looking for a second home and investors. By the end of the summer of 2021, the resort had sold out of its first phase of 37 Signature Apartments designed by the Pritzker Prize-winning RCR Arquitectes. The 44 apartments in the second phase, priced from €580,000 for a one-bedroom home, are also now 60 percent sold out, with some sales to clients who had previously invested in the first phase. The construction of the second phase is scheduled to begin this summer.
Palmares has also seen demand increase for its building plots. Priced from €1.15 million, the plots serve buyers looking for luxurious homes with deep connections to nature, designed around their individual needs. The resort is also home to eight Signature Villas—turnkey four-bedroom homes from RCR Arquitectes, starting at €3.4 million.
Palmares Signature Villa
The “Portuguese Resorts Market Report” from Confidencial Imobiliário and the Portuguese Association of Residential Tourism and Resorts (APR-Associação Portuguesa do Turismo Residencial e Resorts) shows that across Portugal as a whole, the number of resort homes purchased increased by 70 percent in 2021 compared to 2020 and already exceeds 2019’s activity by 30 percent.
The search for serenity
The pandemic has had a notable impact on many of the practicalities of buying a property in Portugal while living overseas. Travel and viewing were significantly disrupted, with developers racing to deliver virtual solutions to the problems and restrictions that COVID imposed. However, the impact has not been limited to practical details; it has also caused buyers to reassess what they are seeking.
Spacious homes with plenty of fresh air and private outdoor areas have become highly prized due to their ability to deliver a stress-free holiday experience. Access to facilities designed to promote healthy living is also a key consideration.
At Palmares, both the low density of construction at just 5.7 percent and the on-site 27-hole golf course, designed by renowned American architect Robert Trent Jones Jr, support buyers’ focus on space, serenity and staying healthy. There’s also a spectacular new clubhouse, designed by RCR Arquitectes and home to Michelin-starred Executive Chef Louis Anjos, providing fresh, seasonal flavours that marry the Algarve’s rich culinary history with modern techniques.
Who is buying?
After Brazilians, British citizens make up the second-largest group of foreigners residing in Portugal. SEF figures show that 42,071 Britons were living in Portugal in 2021. Some of those stay in the country courtesy of a Golden Visa that grants residency linked to investment.
In 2021, 2,036 people moved to Portugal due to the Golden Visa programme. Thirty-seven percent of them came to Portugal from China, 25 percent from Russia, 11 percent from South Africa, 8 percent from Turkey, 7 percent from Brazil and 11 percent from other locations, including the UK. Chinese citizens have accounted for the largest group of Golden Visa grantees every year since the scheme was launched.
Interestingly, American buyers make up the largest percentage of buyers at Palmares Ocean Living & Golf, accounting for 25 percent of property purchases over the last two years. They are followed by Portuguese buyers (22 percent), British buyers (14 percent) and a wide range of other nationalities, including Germany, Switzerland, Belgium and the Czech Republic, among others.
In terms of age, those buying at Palmares have been increasingly from younger age groups over the last few years. Countering the traditional view of property buyers in Portugal being retirees, 77 percent of purchasers at Palmares in 2021 were under 55 years of age.
Looking ahead
What does 2022-23 hold in store for the Portuguese property market? Current trends indicate the market is in for a busy couple of years, with plenty of activity from both domestic and overseas buyers. The fact that Portugal has just become the first country in the European Union (EU) post-Brexit to implement electronic passport gates that fast-track travellers from the UK should certainly help boost in-person viewings by making access easier.
Global tensions—both economic and political—and the continued presence of COVID-19 will all feed into buyers’ considerations over the next couple of years. For many, they underscore the need for a place to which they can retreat—a sun-kissed home where, for a short while, they can forget about their cares and enjoy some much-needed time away from the pressures of modern life. For others, these factors drive home the value of putting money into bricks and mortar instead of forms of investment that can fluctuate more wildly in response to global events.
Where better than Portugal to meet both these needs?
For more information on Palmares Ocean Living & Golf, please email realestate@palmaresresort.com, call (+351) 917 766 932 or visit www.palmaresliving.com