Portugal » Market Report

Most people who live in cold wet climates dream of owning a property in the sun and more seem to be turning to the southern coast of Portugal. There is a large choice of property from luxury villas to more modest apartments and townhouses. Many people have chosen to build beautiful homes with swimming pools and often look inland and the mountains where land is a little cheaper, but construction costs can be higher.

Foreign investors are not required to have a national partner. For buyers there are key differences from the process in most European countries. First, you must get a tax card and fiscal number from the local authorities and must nominate a Portuguese postal address for documentation. Second, only a small proportion of Portuguese finance houses lend to foreign buyers, so most Britons may need to arrange a mortgage at home. Third, many apartments in Portugal (especially those more than 20 years old) are community-run thus buyers must purchase a share in the organisation and be responsible for communal areas.

At a time when the property market in some of the European countries is slowing, the Algarve seems to be very much on the up. Prices have risen and are set to continue rising, that means investment opportunities are good. Portugal is an exceptionally pleasant place to live and certainly lures back scores of holidaymakers, year after year. The Algarve is most popular because of the weather - 280 days of sunshine a year but it is Portugal's busiest, most developed region.

As always, new homes are more expensive than old. Prices have risen modestly and the Algarve tends to have the largest capital increases.

Legal fees vary from 1 to 2% of property value with deed registration a further 1%.

International Property Brokers forecast that Portugal seems to be very strong for investment. Prices have risen and are set to continue rising leading to greater investment opportunities.