Portugal is a southern European country on the Iberian Peninsula, bordering Spain and the Atlantic Ocean.
Its oceanside location influences many aspects of its culture – salt cod and grilled sardines are national dishes, the Algarve's beaches are a major tourist destination and much of the nation’s architecture dates to the 1500s-1800s, when Portugal had a maritime empire.
July is the hottest month in Algarve with an average temperature of 24°C (74°F) and the coldest is January at12°C (54°F) with the most daily sunshine hours at 12 in August.
The wettest month is December with an average of 117.2mm of rain.
Most new properties (particularly in the Algarve) are part of purpose-built developments, many of which are planned as holiday homes and may not be attractive as permanent homes. If you’re buying an apartment or house that’s part of a community development, check whether your neighbours will be mainly Portuguese or foreigners.
Some foreigners don’t wish to live in a community consisting mainly of their fellow countrymen (or other foreigners) and this may also deter buyers when you wish to sell. On the other hand, some foreigners don’t want to live in a Portuguese community, particularly if they don’t speak Portuguese.
Prices of new properties vary considerably with their location and quality, from around €100,000 for a studio or one-bedroom apartment in a resort; from €130,000 for a two-bedroom apartment or from €150,000 in the case of a townhouse; from €150,000 for a three-bedroom apartment or townhouse; and from around €700,000 for a four-bedroom detached villa.
It’s often cheaper to buy a new home than an old property requiring modernisation or renovation, as the price is fixed, unlike the cost of renovation which can soar way beyond original estimates (as many people have discovered to their cost). If required, a new property can usually be let immediately and modern homes have good resale potential and are considered a good investment by Portuguese buyers.
On the other hand, new homes may be smaller than older properties, have smaller gardens and rarely come with a large plot of land. New properties are covered by a warranty against structural defects.
Most new properties are sold by property developers ( promotor/ promovedor) or builders ( construtor), although they’re also marketed by estate agents. New developments usually have a sales office and a show house or apartment ( casa modelo). When a building is purchased off-plan, payment is made in stages as building work progresses.
Note that it’s important to ensure that each stage is completed satisfactorily before making payments. If you aren’t able to do this yourself, you should engage an independent representative (e.g. an architect or structural engineer) to do it on your behalf.
It has been calculated that around half of all new properties have construction defects or deficiencies and in around a third of cases the contract conditions aren’t fulfilled, particularly regarding the completion date and the quality of materials used.
If you’re buying a property off-plan, you can usually choose your bathroom suite, kitchen, fireplace, wallpaper and paint, wall and floor tiles, and carpet in bedrooms, all of which may be included in the price. You may also be able to alter the interior room layout, although this will increase the price.
It’s best to make any changes or additions to a property during the design stage, such as including a more luxurious kitchen, a chimney or an additional shower room, as they will cost much more to install later.
The quality of new property in Portugal has improved considerably in recent years and generally ranges from good to excellent. The best (and most expensive) properties are often built by foreign builders, possibly using quality imported materials and fittings such as doors, windows, and bathroom and kitchen suites, in order to ensure a high standard.
The quality of a building and the materials used will be reflected in the price, so when comparing prices ensure that you’re comparing similar quality. Cheaper properties aren’t usually the best built, although there are exceptions.
If you want a permanent, rather than a holiday home, you’re better off opting for quality rather than quantity. The average price for new properties on the Algarve is between €500 to €1,750 per square metre, depending on the quality, plus the cost of land.
The word luxury is often used loosely by builders and developers in Portugal and should be taken with a pinch of salt (it should mean what you want it to mean).
A luxury apartment or townhouse should include some or most of the following: a full-size, fully fitted kitchen (possibly with a microwave, hob/oven with extractor hood, dishwasher, fridge/freezer and washing machine); a utility room; large bathrooms (often en suite to all bedrooms) with bidets and dressing areas; a separate shower room; air-conditioning and central heating (possibly under-floor) in the lounge and bedrooms; double glazing and shutters (possibly electric) on all windows; cavity walls (for sound deadening and cooling); one or more fireplaces; a wall safe; ceramic tiled floors in the kitchen and bathrooms, and marble-tiled floors in other rooms; fitted carpets in all bedrooms and dressing rooms; built-in mirror-fronted wardrobes in bedrooms; communal satellite TV; telephone outlets; 24-hour security and resident concierge; panic call buttons and intercom to a concierge; automatic lifts; basement car parking; and a lockable basement storage room.
Luxury properties that are part of a community also have a wide range of quality community facilities such as indoor (heated) and outdoor swimming pools, tennis courts and beautiful landscaped gardens.
Some properties have an associated golf or country club with a golf course, tennis and squash courts, health spa, gymnasium, swimming pools, sauna, Jacuzzi, snooker and indoor bowling, plus a restaurant and bar.
Most new developments have their own sales offices, usually offering a full management and rental service for non-resident owners. If you wish to furnish a property solely for letting, furniture packages are available and are usually good value for money.
The complete furnishing of a holiday home costs from around €3,000 for one bedroom, €3,500 for two bedrooms and €4,000 for three bedrooms, although if you require good quality or luxury fittings prices are considerably higher.
Resale ‘New’ Homes
Buying ‘new’ doesn’t necessarily mean buying a brand new home where you’re the first occupant. There are many advantages in buying a modern resale home which may include better value for money; an established development with a range of local services and facilities in operation; more individual design and style; the eradication of ‘teething troubles’; furniture and other extras included in the price; a mature garden and trees; and a larger plot of land.
With a resale property you can see exactly what you will get for your money (unlike when buying off-plan), most problems will have been resolved, and the previous owners may have made improvements or added extras (such as a swimming pool) which may not be fully reflected in the asking price
info from justlanded.com
A variety of fees are payable when you buy a property in Portugal, which usually add between 10 and 15 per cent to the purchase price.
The selling agent’s fees are usually between 5 and 10 per cent of the selling price, depending on the cost of the property and the type of contract, and are paid by the vendor. However, they’re usually allowed for in the asking price, so in effect are paid by the buyer.
If you’re looking for a rental property for a few months, e.g. three to six months, it’s best not to rent unseen, but to rent a holiday apartment for a week or two to allow yourself time to look around for a longer term rental.
state agents in Portugal often offer both short and long-term rentals, and developers may also rent properties to potential buyers. A rental contract ( contrato de arrendamento) is necessary when renting a property in Portugal, whether long or short-term.
Portugal doesn’t have a flourishing long-term (i.e. six months or longer) rental market in resort areas, where it’s more common for people to buy, although there’s an adequate choice of long-term rentals in most regions, including everything from studio apartments to luxurious villas with private swimming pools.
Most properties in resort areas are let furnished ( mobiliado), whether long or short-term, and long-term unfurnished ( desmobiliado, sem mobília) properties are difficult to find. On the other hand, in major cities long-term rentals are usually let unfurnished and furnished properties are difficult to find.
Rental costs vary considerably according to the size (number of bedrooms) and quality of a property, its age and the facilities provided. However, the most significant factor affecting rents is the region, the city or town, and the particular neighbourhood.
Long-term rentals are good value in resort areas outside the main summer season (when they’re rare), where it’s possible to rent a property for the entire winter season.
Rentals of one year or longer are difficult to find in the Algarve and are generally very expensive. In major cities, rents are high (in relation to salaries) and contracts are commonly for one year and renewable by mutual agreement between the landlord and tenant.
Portuguese law is heavily weighted in favour of tenants and this acts as a deterrent to landlords who fear being unable to get rid of a tenant when a contract terminates. Long-term rentals don’t usually include utilities such as gas and electricity (or heating).
Short-term rentals are always furnished and are usually for holiday lets of a few weeks or months. A short-term or temporary contract is necessary, which provides tenants with less rights than a long-term contract. There’s an abundance of self-catering properties for rent in Portugal, including apartments, cottages, farmhouses, townhouses and villas.
Rents for short-term rentals are much higher than for longer lets, particularly in popular holiday areas where many properties are let as self-catering holiday accommodation. However, many agents let self-catering properties in resort areas at a considerable reduction during the ‘low’ season, which may extend from October to April.
The rent for an average one or two bedroom furnished apartment or townhouse during the low season is usually from €600 to €900 per month for a minimum one or two month let. Rent is usually paid one month in advance with one month’s rent as a deposit. Lets of less than a month are more expensive, e.g. €300 to €450 per week for a two-bedroom apartment in the low season, which is some 50 per cent of the rent levied in the high season.
Many hotels and hostels also offer special low rates for long stays during the low season. Note, however, that when the rental period includes the peak letting months of July and August, the rent can be prohibitively high (the Algarve is one of Europe’s most expensive regions in which to rent a summer holiday home).
Standards vary considerably, from dilapidated ill-equipped apartments to luxury villas with every modern convenience. Check whether a property is fully equipped (which should mean whatever you want it to mean) and whether it has heating if you’re planning to rent in winter. Rentals can be found by contacting owners advertising in publications and through estate agents in most areas of Portugal, many of whom also handle short-term lets.
Agents fees are equal to one months rent paid by the tenant for long term lets.