Often winning awards as one of Europe’s number one beach destinations, it’s no wonder that the Algarve attracts a growing number of visitors looking to make the most of the great weather, the laid back atmosphere and of course, the famous golf courses.
It’s also a region that offers much for those wishing to acquire a sound investment with several financial benefits including tax advantages, low entry rates and the Golden Visa scheme.
While tourism is the primary driver of the Algarve’s economy; retail, wholesale and construction also drive the Algarve’s economic activities. More traditional fishing and agriculture is also a driver of the location’s economic outputs.
Taking into account the population dynamics, the region is characterised by a relatively low population density ), which is below the national average and among the areas with the lowest regional population density in Portugal.
The regional GDP per capita expressed in purchasing power standards (PPS) has decreased in the last few years. However, it is still the second highest amongst the Portuguese regions, reaching 78.7% of the EU28 average.
As the most touristic part of Portugal, the Algarve attracts a broad demographic of visitors. While 2020 has of course impacted on the market, in 2019, the Algarve saw the region reach a historic figure of 20.95 million overnight stays at 5.07million overall guests and also a strong demand from domestic tourists with numbers growing 8,5% when compared to 2018.
With over 300 days of sunshine every year, the region benefits from year round popularity, keeping occupancy levels reasonably high year round.
Visitors from Europe comprise more than 80% of international arrivals to Portugal, led by those from Spain (22%) and the UK (19%). National statistics show that approximately a third of international guests typically stay in Portugal’s Algarve region. However, because the average length of a visitor’s stay here is longer than that in other areas.
Why Invest in Algarve Property?
The Algarve often tops polls for best places to live, and it’s easy to see why. A friendly, relaxed atmosphere permeates throughout the region and combines with a relatively low cost of living. Thanks to these factors, many choose the Algarve as a place to invest in with a view to using a property as a holiday home, or somewhere to retire to.
Entry costs compare incredibly favourably with other tourist regions in Europe and combined with average rental yields of between 5% and 7% makes property in the Algarve very attractive.
Additionally, Portugal benefits from distinct tax advantages – there is no inheritance or gift tax and no wealth tax.
Portugal also still offers a Golden Visa scheme. Launched in 2012, The Portugal Golden Visa program has proven to be the most popular scheme in Europe with investors attracted to its flexibility and benefits. An investment of €500,000 (or €350,000 reduced option) in real estate in Portugal will gain a residency permit for a family including dependent children. The golden visa can be renewed every two years, providing the applicant spends two weeks in the country every two years.