Algarve Property Market Analysis Reveals Vast Price Disparities Across Municipalities
A quarterly study released by the property portal Imovirtual has detailed the significant cost variations for buying and renting homes across Portugal's Algarve region. The analysis, based on data from the second quarter of 2025, identifies the most and least expensive municipalities, revealing that property acquisition costs can be as much as 81% lower in some areas compared to the regional average. For renters, the difference can be up to 36%, offering a clear guide for those seeking more affordable living options in the popular southern region.
The report establishes the average sale price for a property in the Algarve at €538,333, with the average monthly rent standing at €1,333. These figures are heavily influenced by high demand from both national and international buyers, particularly in prime tourist centers. The municipality of Loulé, which encompasses the luxury resorts of the 'Golden Triangle', was identified as the most expensive area to purchase a home, with an average sale price of €705,000. For rentals, Albufeira commands the highest prices, averaging €1,566 per month.
In stark contrast, the study highlights several municipalities where prices are substantially more accessible. Alcoutim, a tranquil municipality in the eastern Algarve along the Guadiana River, offers the lowest average sale price at just €101,333, representing an 81% discount from the regional average. The mountainous region of Monchique is the second most affordable for buyers, with an average price of €260,000, 52% below the average. Other municipalities offering significant savings include Vila Real de Santo António (€366,333), Portimão (€395,833), and Olhão (€398,199), all presenting prices more than 25% below the regional mean.
For the rental market, the data points to the eastern Algarve as the most budget-friendly area. Castro Marim, located near the Spanish border, has the lowest average rent at €850 per month, a full 36% cheaper than the regional average. The historic city of Tavira follows, with average rents of €1,000 per month, representing a 25% saving. The municipalities of Lagoa and Olhão also feature rental prices slightly below the regional average, at €1,233 and €1,308 respectively.
A spokesperson for Imovirtual commented on the findings, stating, "The Q2 2025 data confirms that the Algarve is a diverse market with multiple price points. While headline figures are driven by prime coastal locations, there remains a considerable number of municipalities where both purchasing and renting are significantly more affordable." The report underscores the continued pressure on prices in tourist-heavy zones like Loulé and Albufeira, while also confirming that areas such as Tavira and Olhão provide a more accessible entry point into the Algarve property market.
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