Portugal is beginning to tempt property investors away from Spain, according to reports on one property portal.

BuyAssociation has claimed that the Portuguese government are likely to reap the rewards of tight planning regulations it had in place during the economic downturn and entice buyers to the country.

The portal points to the Algarve as a popular destination for potential investors and after a two per cent rise in prices over the course of 2009, it could be a favourite destination.

"This year, Algarve property is expected to continue to rise steadily, enticing the traditional Spanish villa investor to turn to the country's neighbour instead," the website predicts.

"With its gorgeous beaches, golf courses and sunny climate, overseas investors see the long-term potential for returns on purchasing Algarve property."

Furthermore, BuyAssociation claim that the region is likely to see a surge of tourism in 2010.

The European commission recently said that Portugal's economy will fare better in 2010 than previously believed, with growth of 0.3 per cent expected.