Britons strengthen their position as main homebuyers in Algarve resorts

British made 56% of acquisitions by internationals in Albufeira-Loulé and 35% in Barlavento

Quinta do Lago

The British continue to be the main buyers of homes in Portuguese resorts and even reinforced their share in the Algarve in the second half of 2, according to the most recent study on the Resort Market in Portugal carried out by Confidencial Imobiliário in partnership with APR – Associação Portuguesa de Resorts, referring to the 2020nd semester of 2.

According to the study, in this period, the British made 56% of the acquisitions by internationals in Albufeira-Loulé and 35% in Barlavento, «with the most active foreign buyers being in the Algarve», according to the Portuguese Association of Resorts.

At the same time, they also reactivated investment in the Atlantic Coast, achieving a 5% share in purchases by foreigners in this destination.

On average, UK buyers invested 6.600€/m2 in properties acquired in Albufeira-Loulé, according to data from SIR-Resorts.

In the second half of 2, the APR highlights the “return” of other European buyers, some of which were absent in the previous semester. This movement has made Europe, for Portuguese Residential Tourism, the dominant market of origin in all regions, with weights of more than 2020% in the Algarve and 90% in the Lisbon region. Among them, Ireland, the Netherlands and Germany stand out.

The average value of the offer at resorts in Portugal was €4.273/m2 in the 2nd half of 2020, compared to the 4.513€/m2 reached in the average offer in the previous semester, which is the highest value in the series. of SIR-Resorts, started in 2016.

In the higher range, which is monitored through the 95th percentile of values, the behavior is identical, with an offer value of €2/m8.014 in the 2nd semester, below the €8.516/m2 recorded in the previous semester.

In the Albufeira-Loulé axis, which aggregates almost 50% of the accounted offer, the average value remained stable between the two semesters, reaching €5.325/m2. In the higher range, the value of the offer on this axis fell from €9.768/m2 to €9.209/m2.

This zone, according to APR, «continues to stand out from the rest, with its average value of offer in resorts between 40% and 62% above the other monitored routes, namely the Atlantic Coast, and the Barlavento and Sotavento of the Algarve» .

Also according to the Resorts' House Price Index, the price of houses in residential tourism developments in Portugal recovered in the 2nd half of 2020, increasing by 5,8% in semi-annual terms.

In the first half of the year, the chain variation in prices had been -0,4%, "a note of stability after a remarkable decline of 12,7% at the end of the second half of 2, a period marked by strong uncertainty regarding to Brexit, which would only come into effect at the beginning of 2019», states the APR.

In year-on-year terms, and as a result of the chain recovery of the last two semesters, the variation in resort prices returned to positive territory at the end of 2020, recording an increase of 5,3% compared to the end of 2019.

On the other hand, the expectations of operators active in the Residential Tourism market improved in the 2nd half of 2020, after having shown negative in the 1st half for the first time since the Resort Market Survey was carried out (2017).

The net balance of responses related to price evolution went from -7 points in the 1st semester to +11 points in the 2nd semester.

Even so, according to the APR, “the anticipated evolution for prices is now more contained, with operators foreseeing an increase in 2021 of only 0,4%. Sales expectations also improved, from a net balance of 14 to 32 points».

Even so, «confidence is not immune to the pandemic and both price and sales expectations are well below those expressed a year earlier, when the net balances of responses regarding the evolution of prices and sales exceeded 40 points».

There is also, says the APR, "the consensus that the pace of sales growth depends on the return of travel, especially from the United Kingdom."