Portuguese Beach Resorts Pique International Interest

Algarve and Cascais are tops for high-end buyers

Rafael Ascenso, manager of estate agency Porta da Frente, sold homes near Lisbon last year to people of 35 different nationalities in a sign of the dramatic change of fortune for a country that was in peak crisis just a few years ago. In fact, following the 2008 financial crash, Portuguese property prices fell by up to 50%.

As part of this new wave, beachside homes in Portugal are becoming as hot as the country’s year-round climate (over 250 days of sunshine are guaranteed a year), with a growing number of the global wealthy looking to invest in one of the world’s best destinations for golf, surfing, vast empty beaches and secure living.

"Globally, Portugal has a great power of attraction,” said Miguel Poisson, managing director at Portugal Sotheby's International Realty. It appeals to high-end buyers for a number of reasons, he said. “The natural beauty of the coastline, from vast white sandy stretches to small coves, offers variety. The country is very safe and private. There is a plethora of Michelin-starred restaurants and fantastic food and wine, easy flight access, excellent roads, health services, shopping and a very good climate.” Mr. Poisson noted that Portugal was one of the top-three most peaceful countries in the Forbes World Global Peace Index in 2017.

Portugal's beachside resorts, particularly on the southern coast in the Algarve, have long been favored by the British and Irish but now non-Europeans are starting to invest more enthusiastically, too. Mr. Ascenso mentions Brazilians, in particular, who share a common language with Portugal, Chinese, South Africans and, increasingly, American citizens, in a trend he started to see last year.

“Portugal is still relatively unspoilt compared to the south of Spain or France, which can feel overbuilt,” said Alison Buechner Hojbjerg, one of the directors at Quinta Properties Savills. “Portugal has been strict with building permission so you have never had an abundance of builds and there are still lots of quiet yoga retreats, agro-tourism destinations, huge expanses of white sandy beach where you won’t see a single property. It is still a little bit of a secret.”

Many foreigners are attracted by Portugal’s Golden Visa Program, which fast-tracks second-home buyers who invest in property (worth at least €500,000, or US$625,750)

to citizenship. Golden Visa holders can also travel within Schengen countries (Schengen comprises 26 European states that have abolished passports and all other types of border control at their mutual borders), without the need to apply for a visa for each country.

Chinese investment in Portugal through Golden Visas has so far amounted to €2 billion (US$2.5 billion), the Foreigners and Borders Service revealed in January, representing 60% of the money raised through the program, followed by €400 million (US$500 million) from Brazilians and €140 million (US$175 million) from South Africans.

Another program that attracts foreign buyers, introduced in 2009, is the Non-Habitual Tax Residency Regime. It exempts non-residents who spend at least 183 days a year in Portugal from paying income tax on non-Portuguese incomes for a period of 10 years. (There’s no inheritance tax in Portugal either).

Below, a look at some of the top resort spots for second-home buyers:

Cascais

This is where King Luis I, on the throne during the mid-19th century, chose as his royal summer retreat. The nobility built villas and gardens at the similar time, during the 19th century. Since then, the Portuguese nobility have constructed lavish villas and gardens in the area.

Cascais is considered the Portuguese Riviera, with a yacht-filled harbour and high-end restaurants. This is where the wealthiest Portuguese want to live in a variety of homes, from smart architect-designed luxury apartments to townhouses and huge villas with water-views. This area, though, is less resort and tourism based than the Algarve.

Cascais

Second-home buyers mix with those who live there full time, along winding alleyways or in grand historic homes all within commuting distance of the capital. There are plenty of international schools, shopping centers and a cultural museum quarter, here, too.

Mr. Ascenso said he has seen a spike in interest in Cascais, where he is currently listing a house for €25 million (US$31.29 million). The wealthy area is considered Lisbon’s coastline; many of its residents commute to Lisbon because it is just 25 minutes by car.

Villas are normally sold for between €1.5 million and €6 million (US$1.88 million and US$7.5 million), according to Mr. Asceno. There are also many luxury apartments—the most expensive in this coastline of Portugal per square meter—reaching up to €13,000 (US$16,270).

Algarve

The Algarve, which is a two- to three-hour drive from Lisbon, stretches across the southern-most coastline of Portugal, from Cabo de São Vicente in the west (the most southwesterly point in Europe), to the border of Spain in the East. Its “golden triangle,” an area between Almancil, Quinta do Lago and Vale do Lobo in central Algarve, still attracts the largest number of foreign buyers, and the highest prices.

In the Golden Triangle, buyers are spoiled for choice, with 37 championship golf courses where 50,000 rounds of golf are played a year. The sport is a huge attraction all year round and people who want their holiday homes to work hard and make money when they are not using it can reasonably expect to be able to rent it out from Easter to late October.

The Algarve is the most popular area for tourism in Portugal and the second homes market here is geared toward those who want a property for vacation or golfing. The majority of the most desirable investment properties in central Algarve are found in established gated resorts.

Between Quinta do Lago to Vilamoura and Vale Do Lobo, you will find the most expensive real estate in the county, said Ms. Buechner Hojbjerg, one of the directors at Quinta Properties Savills. These golf resorts made up of exclusive homes have been going for decades, but are as popular as ever. They are all about the manicured look and luxury with convenience.

Drive into an estate such as Quinta do Lago and you see that all is immaculately kept, patrolled, and secured, “like entering a little oasis,” Ms. Buechner Hojbjerg said. The 550-hectare estate comprises holiday rentals and plots and villas to buy, as well as four golf courses, restaurants and leisure facilities for visitors and residents.

“Prices are high, demand is huge, the market has got much stronger,” she added.

The best equipped houses in Quinta do Lago rent out for between €9,000 and €15,000 per week, according to Savills.

“Rental income is important," said Mr. Koch de Goonreynd, "but so is the ease of the Algarve for owners, a place that is easily accessible and offers everything on tap.”

Prices in the resorts vary but can reach €10 million to €11 million (US$12.5 million to US$13.8 million) for a plot with a sea view, according to Ms. Buechner Hojbjerg.

There are about 700 villas in Quinta do Lago and 800 villas or plots in Vale Do Lobo with the opportunity to still build the holiday home of your dreams from scratch.

“Water views are probably one of the most important aspect for purchasers looking in the Algarve today,” said Alex Koch de Gooreynd, partner at Knight Frank. "There is a special cache for finding something with sweeping ocean views.”

New Hot Spots

A more rugged and affordable western Algarve is coming into its own.

Mr. Koch de Gooreynd recently sold a house in the small village of Benagil, which received at least 50% more internet inquiries than any other house on the market in Portugal, he says.

Here it is more affordable. A buyer will pay €500,000 to €1 million (US$625,690 to US$1.25 million) for a three- to four-bedroom villa with a pool and a sea view, compared to €2.5 million (US$3.13 million) for the same kind of property in Quinta do Lago.

The views of golf courses from properties are “equally wonderful” and can also command big premiums, Mr. Koch de Goonreynd said, but aren’t as much of a necessity as they are for buyers as they are in central Algarve. The western Algarve, he said, appeals more to those seeking nature and wild views.