QP Savills Algarve Luxury Residential Market Report – Algarve continues to outperform the rest of Portugal in housing market
The average Algarve residential market in 2025 was defined by “strengthening momentum” according to the latest QP Savills ‘Algarve Luxury Residential Market Report’.
The Algarve continued to outperform national averages throughout 2025, reinforcing its position as one of Portugal’s most resilient and internationally driven residential markets.
By August 2025, average residential values reached approximately €3,467 per square metre, representing annual price growth of 9.3%.
Price growth was particularly pronounced in municipalities like Loulé, Lagos, São Bràs de Alportel and Silves, where limited supply and string demand continue to support upward pressure on values.
Luxury villas
Luxury villas in the central Algarve outside of the developments (Vale do Lobo and Quinta do Lago, Vilamoura etc) now average €6,250 per square metre.
International purchasers remain a defining force Foreign buyers accounted for over 30% of all residential transactions across the Algarve, rising to more than 80% in prime luxury locations, underlying the global nature of demand at the upper end of the market.
Branded residences
As for new homes and branded residences, QP Savills says the “market has come of age”.
“New build continues to play an increasingly important role in the Algarve property market despite ongoing planning constraints and extended delivery timelines.
“Branded residences are emerging as a particularly compelling segment. Although still limited in number, schemes aligned with established hospitality and lifestyle brands benefit from enhanced buyer confidence through assurances around quality, services provision, and long term asset management,” the report details.
Pricing in prime locations
Pricing in prime locations remained steady over the course of the year, particularly at the top end of the market, supported by limited supply and growing international demand.
An interesting feature of the Algarve market in 2025 had been the emergence of regional ?catch-up’ hotspots outside the established prime locations, notably São Bras de Alportel, Silves and Tavira, which all experienced double-digit annual price growth.
At QP Savills, the was reflected in an 11% increase in buyer leads and a clear uplift in transactional activity as confidence returned and purchases acted more decisively.
