Algarve Property is Better Value Than a Second UK Property
Country: Algarve; Portugal
Although central Algarve property prices have spiralled in the last few years, property is still better value than a second home in the UK and the climate wins out every time. And should you wish to discover what 'real' Portugal is like, you only need to venture a few miles into the hinterland to discover the prettiest of villages and unspoilt countryside.
The furthest west you can go and still be protected from the winds by the Monchique Mountains is Salema. These western reaches have prided themselves on being less crowded and more affordable, but the area is catching up fast. This is for two reasons: very tight planning controls are pushing up the price of land and it has become far more accessible since the new motorway from Faro to Lagos was finished, cutting the journey time to 50 minutes. So, it is left to the eastern Algarve, which is the last area to be developed, to offer the best value for money.
"Eastern Algarve property is probably 50 to 60 per cent less expensive than in the well-established central developments like Vale do Lobo and Quinta do Lago," says Robert Pierce, who runs Property Finder's Portuguese office. "People are choosing this end of the Algarve because it is more rustic and you get far better value for money. Tavira, the main town with a fishing port, has been well preserved and is known for its Roman architecture". Between Tavira town and Vila Real de Santo Antonio town, which is a sleepy fishing village dating back to the 18th century, is the recently launched Monte Rei Golf and Country Club. This is a development of over 400 hectares acres in beautiful countryside north of the A22 with two 18-hole golf courses, both designed by Jack Nicklaus. His first Signature course opens this month and the development's facilities will include a tennis complex, spa and equestrian centre, plus a beach club with its own gym, tennis courts and pool. The first 'village' will be called O Miradouro and will have 90 villas, townhouses and apartments on ten hectares. So far, 30 per cent of the development has sold off-plan and four-bedroom villas in plots averaging around 2,800 square metres are priced from around £1 million. Three-bedroom townhouses are priced from around £660,000.
Near Albufeira, you can buy a freehold quarter share of a townhouse at Herdade dos Salgados, a development of modern townhouses and apartments beside Salgados beach. This gives you 13 weeks usage a year, thus reducing both purchase price and maintenance costs and you don't need to worry about furnishing the property. You can also swap two weeks for a holiday on resorts around the world or buy another quarter (or whole) of the property should you wish. Premier Properties International is selling a quarter share of a two-bedroom townhouse from £129,000.
This type of fractional ownership increases in value just as a wholly owned property would and your share can be sold or left in a will. John and Judy Duff bought two twelfth shares (two months) of a village house on a new village (Quinta da Encosta Velha) at Parque da Floresta, a Vigia Group development near Budens. "We love the local area and the resort, but we try hard to do a lot of other travelling, so owning a share of a property works really well for us. It gives us the flexibility we need," says Judy. The couple, who are retired, bought their share of the property in 2006. "Quinta da Encosta Velha is like a little village and the house is lovely and beautifully furnished. We have no worries about the house when we're not there because we know that someone will be taking care of it. We also love Salema Beach and the local restaurants. Nearby Lagos is great too and it really is a wonderful area."
The Vigia Group is also marketing Quinta da Fortaleza, which is four kilometres from Parque da Floresta, between Salema and Burgau and overlooking Cabanas Velhas Bay, where Vigia's beachfront bar and restaurant, The Blue Wave, is located. Quinta da Fortaleza consists of 130 three- and four-bedroom linked villas nestling into the hillside by the beach, each with their own pool, terraced decking and terraces. Prices start from around £492,000. And at Salema Beach, The View is a smaller development of 55 two- and three-bedroom townhouses with roof terraces, communal swimming pool and gardens. Prices start from around £295,000. Near the town of Silves, the Amendoeira Golf Resort is under construction. This is a 260-hectare development by the Oceanico Group and will have two golf courses, one to be designed by Nick Faldo, the other by Christy O'Connor Jnr. There will also be outdoor and indoor swimming pools, a restaurant and bar, a newsagent, an internet cafe and a sporting club with full-size football pitch, tennis/paddle courts and lawn bowling greens, tennis club and five-star spa - so lots to do for all the family. And for young children, there will be an interactive arcade, kids club, adventure playground and crche.
Properties, which will be designed to reflect the local Moorish architecture, will be a mix of two- and three-bedroom apartments, three-bedroom villas with optional pools and four- and five-bedroom villas with pools. You can buy these outright or on a fractional ownership with prices starting at around £340,000. If you bought through the company's Stepping Stones' scheme, a quarter ownership can be bought for around £90, 000. All properties have a view of the golf course and the price includes a golf title.
Oceanico also has a development of 146 apartments at Vila Ba’a, which is in the village of Praia da Luz, six kilometres west of Lagos. The architecture of the development reflects the area's heritage (it used to be a Roman bath complex), and within the landscaped gardens with cypress, olive and palm trees and clusters of lavender, there will be two swimming pools and restaurant. Prices for the one-, two-, three- and four-bedroom apartments start at around £186,200.
And if you wanted something more contemporary, then a five-star resort right on the beach in Sagres might suite. At Martinhal, there will be 120 two- and three-bedroom semi-detached villas and garden cottages built in stone, glass and concrete. On the development will be three restaurants, two beach restaurants, children's club and creche plus a luxury spa, sports club, indoor pool, gym and tennis courts. The properties are being sold by Pure International on a ten-year investment leaseback scheme with a guaranteed return from four to seven per cent from £362,000.
However, not everyone wants to be on a new development where 60 per cent of the purchasers are likely to be British, with 30 per cent Irish and a smattering of Portuguese and Scandinavians thrown into the mix. But finding something to do up is not that easy any more. The bread and butter of the eastern Algarve, in particular, used to be cottages with bougainvillea around the door, which needed renovation. "Now these are very expensive and you can buy a brand new apartment on a development for the same price as something which needs totally doing up - between €150,000 and €300,000 [£102,000 and £203,000]," says Robert Pierce.
But if an older property does appeal, then Winkworth Portugal has a good selection on the market, including a restored four-bedroom villa between Loule town and Sao Bras de Alportel town for €325,000 (£220,000) and a farmhouse needing renovation between Loule and Almancil for €495,000 (£335,000). Knight Frank is selling a smart four-bedroom villa near Portimao and ten minutes from the beach with swimming pool for €1.3 million (£880,000) and a rustic four-bedroom villa on the banks of the Alvor Estuary for €799,000 (£541,000).
"People are looking either for holiday homes on developments with facilities and management or to purchase initially as a holiday home, which they will retire to in five or six years time," says Georgina Richards of Knight Frank, who has an associate office, Sadler's Property, in Lagos. "More and more people are looking with a long-term plan and not necessarily people who know the area".
Should you want to rent out your property, as long as it is near a golf course and other facilities, it is possible to earn enough income to pay the costs and maintenance charges. One thing that has changed in the last few years is that it is now relatively easy to take out a Portuguese mortgage. "Interest rates are lower than in the UK, but they have to be repaid in euros, which is why there is pressure to let out the property; therefore, something on a golf course, where rentals are good and managed, is often preferable," says Robert Pierce. "However, golf courses have their own set of prices, and Algarve properties on a golf development will be 30 per cent higher than an equivalent property in the surrounding area."
First published in June 2007.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
Mary Wilson
There's also a range of articles for you to read about buying property in Portugal:
As well as our overseas news stories affecting the property market in Portugal .
Or view our range of property for sale in Portugal.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
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