Wealthy Americans Are Triggering a Housing Frenzy in Portugal's Algarve – Find Out Why the Market Is Booming So Rapidly

Portugal's Algarve is no longer just a European secret. The scenic southern coast is experiencing a housing market boom that's turning heads, with Americans playing a significant role. According to Savills, a global real estate agency, the region's real estate market has skyrocketed, with prices for prime properties jumping over 30% in the past year.

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Real estate agents point to tourism as the main driver, with U.S. tourists flooding the country like never before. Official figures from Portugal's national statistics agency show over one million Americans visited the country in the first half 2024. 

That's nearly twice as many as in 2022. Most of them flock to the Algarve, known for its golden beaches, picturesque fishing towns, and mild year-round weather.

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"The top of the property market in the Algarve has historically been predominantly British buyers, but it's changing," said Kerstin Buechner, co-owner of Quinta Properties, a local Savills affiliate. 

She explained that Americans, who made up less than 1% of high-end homebuyers in the Algarve before the pandemic, now form a "substantial percentage" of the market. According to the Portuguese Property Association, cited by Bloomberg, 10% of all foreign homebuyers in Portugal are now Americans.

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"If you walk around Loulé, every second person is American now," Buechner added. "It's unbelievable."

This influx of U.S. buyers has had a noticeable impact on prices. In 2022, the first sale over €20 million set a record for the region, and since then, several more properties at that price point have been sold. The high demand and limited supply, particularly in hot spots like Quinta do Lago and Vale do Lobo, have intensified the frenzy.

"There's less on the market than ever before, and the demand is light years ahead of what we used to have," Buechner noted, adding that the average price of prime properties at her agency rose to nearly €3.5 million in 2023, up from under €3 million the previous year.

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Ricardo Costa, CEO of Luximos, the Christie's International Real Estate affiliate in Portugal, has also seen a rise in foreign demand. He points to the country's digital nomad program as one of the key reasons. Non-EU residents with a monthly income of at least €3,280 and savings of €9,840 can live and work remotely from Portugal.

"People like the mild weather, the surf conditions, the stable politics, and that they can do remote work from here, only five hours away from the East Coast of the U.S.," Costa said. "At the southwestern tip of Europe, we like to say the Americans are our neighbors."

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It doesn't hurt that a million euros stretches much further in Portugal than in other popular spots like the French Riviera or the Greek islands. 

The trend of foreign buyers began in 2012 when Portugal introduced "golden visas," offering residency permits in exchange for investment in the country, including real estate. The government ended this option for real estate purchases last year, but it hasn't slowed American interest. Foreigners can still qualify for the visa by investing at least €500,000 in other sectors, such as research or culture.

"The golden visa program did cause a frenzy in sales," Buechner admitted, but she doesn't believe the appeal is fading anytime soon. "Americans are coming into Portugal because they're fed up with the United States and want a different lifestyle. The Algarve offers that." 

With direct flights from the U.S., such as United Airlines launching from Newark to Faro in 2025, it seems even more Americans will be making the move. And the Algarve is ready.

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