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Beyond Portugal’s Golden Triangle

The Camerons are not the only ones enjoying the delights of the ‘real’ Algarve

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Ferragudo at dusk.

Getty Images
Ferragudo at dusk.
Getty Images

Portugal is proof that austerity works. Its International Monetary Fund bailout was a success, the economy is growing and overseas property buyers have returned, encouraged by golden visa and non-habitual residency tax schemes. This summer there is a buzz back in the laid-back towns of the Algarve as house prices are moving up again and major developments have been kick-started. However, post downturn, many home-hunters are heading away from the so-called “Golden Triangle” — between Almancil, Quinta do Lago and Vale do Lobo — of the central Algarve. Some buyers will always seek the status of owning a home in these world-class resorts, but Meravista.com, the largest Portuguese property portal, reports that in July there were more searches for properties in the western Algarve (39%) than the central (35%) or eastern (26%) tranches. More: A Resort-Like Villa in Portugal “Buyer interest is now evenly spaced along the Algarve, with people seeking affordability outside the big resorts, and greater authenticity in less-developed areas,” says Caroline May, operations director of Ideal Homes Portugal. “Property-hunters seeking the ‘real Portugal’ — especially those relocating — will look north of the N-125 highway [that runs from east to west] around the towns of Loule, Boliqueime and Santa Barbara de Nexe; or to fishing villages such as Fuzeta, Santa Luiza and Cabanas, towards Tavira in the east.” The eastern Algarve is a bit sleepy for some, but French buyers love the charming riverside town of Tavira, with its Roman bridge and 14km sandspit of superb beaches an easy ten-minute drive from the Spanish border. There are also five golf courses to hand, including Monte Rei, which is said to be the best in Portugal. “In Tavira, expect to pay €175,000 (£124,000 or about US$196,000) for a two-bedroom, two-bathroom apartment that has been refurbished,” says John Baker-Malpas, an agent for Ideal Homes. “Three years ago a three-bedroom penthouse with a roof terrace overlooking the river sold for €195,000; now it is €295,000. Prices are going up again.”

Convento das Bernardas is a stunning conversion of a 15th-century convent on the seafront — next to the famous salt pans of Tavira — where two-bedroom apartments start at £160,000. The quadrangle of variously configured duplex and triplex units, with monastically elegant decor, surrounds a tranquil swimming pool area. For a simple life of clam-fishing or boat trips on the lagoon, the nearby beach village of Cabanas de Tavira (part of the O Pomar resort) offers a popular holiday development of apartments set around a piazza and two pools — two-bedroom flats cost from £122,000 (about US$191,000), or £173,000 (about US$271,000) for those with three bedrooms. “This is an area popular with young families, couples close to retirement and Scandinavian snowbirds, rather than the party crowd who prefer big resorts such as Vilamoura or Albufeira,” says João Faustino, of O Pomar developer Newlyn Portugal. “Plus it’s 30 per cent cheaper here to buy an apartment.” More: Spain’s Oft-Overlooked Coastal Treasure The recent acquisition of the marina and golf resort of Vilamoura by the US private equity firm Lone Star — with plans for the biggest marina in Europe — may well widen that differential. While the inland market town of Loule — where TV presenter Phillip Schofield has a home in the hills, and the Algarve’s first Ikea is arriving next year — remains popular, some of the biggest new projects are in the west, around Lagos. Heading west from the town of Portimao, the coastline becomes more dramatic, the beaches bigger or more varied, and the big hotel complexes melt away. West of the riverside fishing village of Alvor — where David and Samantha Cameron enjoyed a drink at the weekend — is Lagos, arguably the most interesting town on the coast, with its Arab-built castle and old quarter, lively marina and Meia Praia Beach. The town has many Scandinavian and British expats and, along with the next-door Praia da Luz, is a hotspot for holiday rentals. Although the town has expanded rapidly in the past decade, there is still scope for new-build schemes. “Today there is a big demand for private condo apartments, with access to a pool, and three-bedroom units sell first,” says Goncalo Rodrigues, of the developer Rodrigues & Vermelho, which is selling smart, two-bedroom apartments in two condominiums from £176,000 (about US$276,000); one in the beachside Porto de Mos, the other in central Lagos (through Ideal Homes). “Prices in Lagos fell by 30% in the downturn but have now been going up for 18 months,” he adds. In the Porto de Mos neighbourhood, expect to pay £318,000 (about US$498,000) for a townhouse or £460,000 to £495,000 (about US$721,000 to about US$776,000) for a villa. Alternatively in the “Beverly Hills” area of Lagos known as Funchal Ridge, you need about £700,000 (about US$1 million) for a villa on a large plot — although you’d pay double for a comparable property on the five-star resort of Quinta do Lago. More: Tips for Americans Buying Real Estate in Mallorca However, the biggest property launch on the Algarve this year comes from the Oceanico Group, which has released 450 homes on three holiday resorts, for sale through Savills. After the global downturn, it took the decision to focus on rentals rather than sales, but now all three resorts are fully operational and buyers are offered new homes with a five-year build guarantee across all budgets. In Lagos, the beachfront Belmar Spa & Beach Resort is a popular hotel with an indoor/outdoor Elemis spa and six pools. Studio apartments start at £83,000 (about US$130,000), one-bedroom apartments from £112,000 (about US$175,000), two-bedrooms from £157,000 (about US$246,000). “With yields of 8.3% net of fees, these rooms provide a really good income,” says Peter Statham, of Oceanico. “In contrast, our resort of Baia da Luz [in Praia da Luz, two-bedroomed units from £128,000] is the best option for year-round residents, while Amendoeira Golf Resort will offer the best capital return.” This article originally appeared in the Times of London.