The Algarve region of Portugal is one of the most popular tourist destinations in Europe. Having suffered more than other countries after the economic downturn, the vibrant country is now making a come-back and is very much in favour with foreign property investors once again.
Such is the turnaround that real estate experts are forecasting growth in Algarve property to reach a whopping 3% in 2015.
According to the RICS/Ci Portuguese Housing Market Survey (PHMS) published recently, property prices across Portugal are expected in to increase by around 4.5% a year for the next five years.
Buyer confidence together with property values remains highest in Lisbon, Porto and the Algarve where rental growth has also been concentrated. Domestic sales have also been boosted with banks offering more mortgage finance as confidence in the country improves.
Director of Ci, Ricardo Guimarães said: "Recent statistics show new mortgage loans increased 20% during the second half of 2014. This is naturally being felt by agents. Their comments suggest this is the main factor changing the market as banks area gradually starting to lend to the sector again".
The report also showed new buyer enquiries increasing in April and extending a run of uninterrupted demand growth going back to August 2013 and agreed sales rose for the 14th consecutive month.
Industry expert Chris White of Ideal Homes Portugal said: "Obviously Portugal has gone through some tough times but the country has worked hard to put the bailout money to good use and has turned its fortunes around over the past four to five years. It has been a struggle at times with austerity measures impacting deeply on the peoples' psyche as well as their pockets but the results of that effort are now beginning to become clear".
The outlook for Portugal's property market has been considered optimistic since the third quarter of last year when house prices across the Eurozone rose by 0.5%, showing gains for the first time since the crisis. According to data released at the time, prices in Portugal increased by almost 5% during the last half of 2014, with the Algarve enjoying the lion's share of price rises.
The pound has gathered strength against the euro for the past 12 months, giving 15% more purchasing power to British buyers. Portugal is a long-term favourite destination for British property investors and with the chance to get more bang for their buck, they have been piling into property on the Algarve, making hay while the sun shines.