Rich Americans are taking over this part of Portugal

Agents say the tourism wave is pushing up purchases, especially by US buyers who are heading to the country in record numbers: over one million tourists from the US visited Portugal in the first half of 2024, nearly double the number of visitors in the same time period in 2022, according to the country’s national statistics agency.

Visitors flock, in particular, to the Algarve—home to under 500,000 residents—for its famous sandy beaches, scenic fishing towns and year-round temperate weather. Starting in 2025, United Airlines will have a direct flight from Newark to the town of Faro, the gateway to the region.

“The top of the property market in the Algarve has historically been predominantly British buyers, but it’s changing,” says Kerstin Buechner, co-owner of Quinta Properties, the Savills affiliate in the region.

She says Americans went from less than 1% of buyers for high-end homes in the Algarve pre-pandemic to become what she calls a “substantial percentage” today. According to the Portuguese Property Association, 10% of all foreign buyers in the country are American. “If you walk around Loulé, every second person is American now,” she says. “It’s unbelievable.”

Tourists with the stronger dollar are having an impact on prices. The first sale of over €20 million, a record for the region, took place in 2022, and Buechner says Quinta Properties has now since sold several properties at this level. Prime supply is tight as a result, especially in the popular areas of Quinta do Lago and Vale do Lobo.

“There’s less on the market than there ever was, and the demand is light years ahead of what we used to have,” she says. Average prime sale prices for Quinta Properties neared €3.5 million in 2023, up from under €3 million the previous year.

Ricardo Costa, chief executive officer of Luximos, the Christie’s International Real Estate affiliate in Portugal, has also seen a rise in foreign demand for homes in the Algarve and cites the country’s digital nomad program as a key reason. Remote workers from outside the European Union can live in Portugal if they have a monthly income of at least €3,280 and savings of at least €9,840.

“People like the mild weather, the surf conditions, the stable politics and that they can do remote work from here only five hours away from the East Coast” of the US, says Costa. “At the southwestern tip of Europe, we like to say the Americans are our neighbors.” And in the housing market, a million euros generally goes much further in Portugal than in other popular tourist areas such as the French Riviera and the Greek islands, or in many big cities in the US, he continues. 

Portugal first became a hot spot for foreign buyers in 2012 after the nation introduced “golden visas,” which tied residency permits to investment in the country, including real estate purchases. Higher property prices prompted the former government last year to exclude real estate investments from the program, although that hasn’t affected prices in the Algarve.

Foreigners can still qualify for the golden visa by investing at least €500,000 in investment funds. Other options include donating to cultural or research projects.

“The golden visa program did cause a frenzy in sales,” says Quinta Properties’ Buechner, but she adds that the Algarve hasn’t seen a slowdown in foreign buyers. “It’s not just about the golden visas. Americans are coming into Portugal because they’re fed up with the United States and wanting a different lifestyle,” she says. “The Algarve offers that.”