To rent, to buy, or to buy to rent? As rental prices rise across the Algarve, the answer could be clear.
The Algarve has long been a highly desirable region for visitors, and with remote working becoming more commonplace and retirees continuing to choose the Portuguese lifestyle for their golden years, it’s no wonder they want to stay for longer periods.
However, for those who rent long-term during their stays in the Algarve, the latest figures could spark a conversation about whether owning a property in Portugal is a better investment.
In 2024, rental prices in the Algarve rose by 7.7%, reaching an average of €14.3 per square metre by the end of December. According to the latest price index from idealista, it’s above the national average of 4.7%.
Areas with the Highest Rental Growth
The municipalities of Albufeira and Faro recorded the highest growth, with rents climbing 13.9% in both areas, while Vila Real de Santo António followed closely with a 13.2% rise. Silves also saw a notable increase of 10.3%.
Moderate growth was observed in Olhão and Portimão, where rents rose by 2.7%, and in Lagos, which saw a modest 1.8% increase. Meanwhile, Lagoa experienced a rare decline of 6.9%.
Most Expensive and Affordable Municipalities
As for pricing, Loulé remains the Algarve’s priciest municipality, with rents averaging €16.3/sqm, followed by Albufeira (€15/sqm) and Tavira (€14.6/sqm). Meanwhile, Faro stands at €14.1sqm.
For those on a budget, Olhão (€11.5/sqm), Vila Real de Santo António (€11.7/sqm) and Lagoa (€12.3/sqm) are among the most affordable options.
For those who spend significant time in the Algarve, the rising cost of renting could make purchasing a property a smarter, long-term financial decision. Investing in real estate offers stability and can also present lucrative opportunities, given that demand for both short-term and long-term rentals remains strong.
Whether you plan to rent out the property or make it your home, buying in the Algarve is an opportunity worth exploring.