Residential tourism on the Algarve attracts investors of 16 nationalities

Residential tourism on the Algarve attracts investors of 16 nationalities

This information is made available in the new SIR-Turismo Residencial, a statistical system which covers the buying and selling of residential tourism real estate developed by the Confidencial Imobiliário in partnership with the APR – Associação Portuguesa de Resorts (Portuguese Association of Resorts) and with Turismo de Portugal.

The numbers show that the districts of Albufeira and Loulé have a concentration of 39% of the total supply of residential tourism in Portugal, confirming this zone’s position as the destination with the most tradition in this market, including integrated projects for resorts.

It was also here that the biggest number of sales were completed in this report between the beginning of 2015 and the end of the first semester of 2016, being also where the average value of supply is highest (from the areas analysed) with a rate of 4,870 euros/m² for houses and 3,250 euros/m² for apartments.

Investors from United Kingdom market are the main buyers, with 64% of foreign transactions with an average transaction value of 1.78 million euros. The Chinese also are very active, and, apart from leading with 10% of sales, have an average investment target in the order of 778,900 euros, and also France, with 13% of aggregated quota in sales, and an average investment of 1.4 million euros.

In geographical terms, the Western Algarve and coastal Algarve hold, 25% and 18%, respectively, of the stock of residential units available for tourist use, being the most sought-after destinations for Northern Europe, with 60% of sales combined. Here, the average price for people from abroad is 318,000 euros.

According to SIR – Turismo Residencial, it is in the Eastern Algarve that the tourist residential product with lower than average market prices can be found, with sales in the order of 2,140 euros/m² for apartments and 3,120 euros/m² for houses. This region contains 8.2% of the supply of stock. Already, Greater Lisbon has 14.2% of supply analysed by SIR, with values of 3,870 euros/m² for apartments and 3,110 euros/m² for houses.

In respect of the range of products, 53% of the product analysed by SIR during this period for all the regions was for houses, 19% for land and 27% for apartments. About 65% of the total numbers of units are within resorts, a characteristic which gives value to assets, both for houses and apartments, as they present higher average values compared to similar products which are not integrated in this kind of project. In the case of apartments, units in resorts present average values of supply of 3,300 euros/m2, compared to the 3,260 euros/mwhich are not part of a resort. As regards houses, this differential is higher, at 4,680 euros/m2 and 3,410 euros/m2 respectively.

 

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