Portugal continues to rise through the ranks as one of the most popular destinations for expats. Affordable living, mild winters, and a strong healthcare system make it attractive, but it’s the Algarve that consistently captures hearts. If you’re considering a move to the Algarve, here’s what you should know, including where to live, rent, or invest, with the latest real estate trends for this year.

What’s Drawing Expats to the Algarve?

Beyond sunshine and lifestyle, Portugal remains one of Europe’s more affordable destinations for expats. And despite recent price rises, the Algarve still offers excellent value when compared to other coastal markets in Spain or France.

As per April 2025 figures, the average price per square meter in the Algarve is €3,467, a 9.3% increase from last year. International buyers continue to lead the market — 92% of transactions in Tavira, for example, involve foreign investors, followed by 82% in Lagos.

The Western Algarve

Lagos is one of the Algarve’s most sought-after towns, especially among digital nomads, retirees and young families. The blend of modern infrastructure and historic charm makes it ideal for long-term living.

For buyers wanting guidance from trusted locals, an experienced real estate agency in Lagos can offer tailored support and deep knowledge of the market.

Meanwhile, those targeting luxury properties will find no shortage of sea-view villas, boutique developments and investment potential. Luxury real estate agencies in the Western Algarve can help buyers access exclusive listings, especially in areas seeing premium growth like Ferragudo and Praia da Luz.

For golf enthusiasts, properties at Boavista Golf Resort in Lagos are the ultimate choice.  With stunning views, top-tier facilities, and a world-class golf course, it’s the perfect spot for those who want to combine luxury living with an active lifestyle.

Lagos saw a 9.8% year-on-year increase in property prices as of Q2 2025, making it a hotspot for both lifestyle and investment.

Not Ready to Buy? Renting First Can Help

Many expats prefer to test the waters before committing to a purchase, and Lagos is a great place to do that. There are many property rentals in Lagos which can help newcomers find flexible accommodation options while they explore different neighborhoods and get to know the region before any purchasing commitment.

The Eastern Algarve

If you’re drawn to traditional Portuguese culture and a slower pace of life, the Eastern Algarve is a compelling choice. Tavira, in particular, is increasingly popular with foreign buyers.

Real estate agencies in Tavira will know which parts of the town are best for year-round living vs. holiday use, this is particularly helpful if you’re interested in renting out a property during the high season for additional income.

Property prices in Tavira have risen 10.4% over the past year, with a surge in demand for homes near the Ria Formosa and historic town center.

Some lesser known areas in the Eastern Algarve include properties in Moncarapacho and Olhão, these are more traditional properties which are usually set on larger pieces of land offering a very tranquil environment. The centres are much smaller and you’ll likely hear more Portuguese than English, something which may be tempting for those who like to embrace true local culture.

Vilamoura

Vilamoura remains a favorite for those seeking a more polished, resort-style environment. The marina, championship golf courses, and top-tier restaurants attract both second-home buyers and rental investors.

If you’re purchasing as a part-time resident or looking to generate income through tourism, there are companies who can serve with your initial real estate purchase and then ongoing property management to ensure your investment is cared for and potentially profitable.

One area of Vilamoura which is particularly interesting is the Old Village. Real estate in Vilamoura’s Old Village is highly sought after, as it provides a relaxed environment tucked away from the nearby marina which offers a more lively experience.

Yields in this part of the Algarve average 4.8% to 5.5%, depending on property type and location.

Summary

The Algarve’s real estate growth is supported by more than just demand — it’s backed by infrastructure and sustainability. This year there has been a 12% rise in eco-certified developments, and new international schools and healthcare facilities are expanding to accommodate the rising number of expat families.

Moving abroad is a big step and it’s all about building a life that fits your vision. It’s important to research each area in depth before making a huge decision.