Algarve and Porto Among World’s Top 10 Luxury Real Estate Markets

The Algarve and Porto in Portugal are home to some of the fastest-growing luxury real estate markets in the world, according to Knight Frank's The Wealth Report 2023.

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Luxury real estate investors are turning their eyes to Portugal. The Algarve and Porto, two regions in Portugal, have made it into the top 10 list of luxury real estate markets in the world. We explore the growing appeal of the Algarve and Porto for overseas investors and examine what has driven the two cities’ remarkable position in the rankings.

The Algarve’s Resilience

The Algarve ranks 7th in the Prime International Residential Index, extracted from Knight Frank’s wealth report, due to its impressive 15.5% increase in luxury real estate values. Portugal’s much-loved coastal region outranks esteemed locations like the Hamptons, Zurich, and Cannes.

In addition, the Algarve ranks among the top five most popular sun destinations last year, nestling amongst exotic locations including Dubai, Miami and the Bahamas.

Porto’s Stellar Debut

Porto, Portugal’s vibrant second city, made its debut and secured 10th place in the rankings. The city’s luxury real estate market experienced a substantial price increase of 12.7%. Surpassing prominent global destinations in terms of luxury property growth, Porto’s position consolidates the city’s allure among Portuguese as well as international investors.

Lisbon’s Steady Growth

While not quite reaching the stellar growth of Porto and the Algarve, Lisbon recorded a 6% increase in luxury real estate prices, and demand for property in the capital continues to outpace demand.

Portugal’s Appeal to Global Investors

Portugal has emerged as the top European destination for North American investors, according to The Wealth Report. American investors now account for one of the top five investors in the country.

And demand from tenants is rising. Rental properties account for only 19.9% of the overall market in Portugal. However, the scenario is entirely different in the main metropolitan areas of Lisbon and Porto, where the number of rental leases comprises 42.3% and 43.9% of the market, respectively. Moreover, these percentages are even higher in the historic centres of these cities, with rental properties representing 64.1% and 54.1% of the market, respectively.

Meanwhile, in the Algarve, the luxury rental market is strongly driven by tourism. The Algarve’s golf courses alone attract over 206,000 visitors each year, many of whom are seeking luxury accommodation for their stay.

It’s safe to say that luxury real estate markets in Portugal are on the rise, with the Algarve and Porto named among the world’s top 10 destinations for high-end living. These regions are proving to be more desirable and profitable than many other well-known markets.

This exciting growth story offers opportunities for investors to get in on the action and reap the rewards.

Contact us today to discover our available properties in Portugal.

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