Rising real estate demand in the Algarve hills

For decades, the Algarve has drawn international attention as Portugal’s sun-drenched southern coast, and its real estate appeal shows no sign of waning.

British buyers, in particular, continue to see the region as a first choice for both permanent relocation and second homes.

Yet with demand for property intensifying along the central coast, an increasing number of investors are widening their search to the surrounding hillsides.

Traditionally, demand has been highest within the Algarve’s Golden Triangle, a stretch that links Quinta do Lago, Vale do Lobo, and Vilamoura.

Known for its world-class golf resorts, Michelin-starred dining and luxury developments, it has long been the benchmark for exclusive living in Portugal.

Its popularity, however, has driven prices to historic highs. Recent figures suggest that values across the Algarve have risen by more than 60% in just five years, with the Golden Triangle comfortably outpacing the average.

For many buyers, the attractions are obvious: Faro Airport is a mere 20 minutes away, there are international schools aplenty, and the coastline offers a blend of sandy beaches and award-winning marinas.

But with limited availability of homes and rising competition, attention has begun shifting inland, particularly towards the traditional market town of Loulé and its surrounding villages.

In areas such as Santa Bárbara de Nexe, Vale Formoso and Goldra, properties are nestled among rolling hillsides, offering larger plots, panoramic sea views and a quieter pace of life.

These settings provide privacy without sacrificing convenience: beaches, golf courses and international amenities are still within a short drive, allowing residents to balance countryside seclusion with coastal sophistication.

The move inland also reflects a growing desire among families for authenticity and space.

Modern villas sit alongside restored farmhouses, and the region’s cobbled streets and whitewashed chapels evoke a more traditional Algarve, one that contrasts with the high-profile resorts of the coast.

Increasingly, buyers are seeking precisely this balance—the tranquillity of a hillside retreat combined with easy access to international culture, sport and education.

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Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.

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