Major cities 'best for Portuguese investment'

Those buying Portuguese property for investment purposes should look to the big cities rather than the holiday resorts, it has been suggested.

Writing for the Guardian, property expert Graham Norwood said that areas like the Algarve tend to be the most popular for overseas buyers looking for holiday homes, although the region does show periodic price volatility.

However, such regions are not suited to every kind of property purchase, he noted, advising: "Anyone wanting a pure investment and long-term tenants (professional renters, not holidaymakers) should furnish their properties, but remember there is little demand in resort areas."

Such purchasers should "stick to Lisbon and Porto", Mr Norwood remarked.

The expert also noted that the country tends to have tighter controls on development and has seen much gentler recent price falls than neighbouring Spain.

Earlier this month, head of the Carlyle Real Estate acquisitions team for Spain and Portugal Rachel Lupiani told Property News the country has a market that is "very localised in character" and has consequently weathered the credit crunch well.

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