According to the Residential Housing Index by Confidencial Imobiliário, the real estate market in the Algarve was underperforming in comparison to the national average.
This is the third consecutive quarter that housing price increases have been below the Portuguese average and demonstrates the erratic behavior of the market in the region, when compared to the rest of the country.
In the fourth quarter of 2017 Algarve house prices rose by 17.6 percent, far above the national average rate for the same period of 12.8 percent.
The fluctuations in the market have resulted in the Algarve accumulating a loss of 4.5 percentage points since the end of 2017, while on a national level the consistent upward trend has allowed for the index to rise by 2.8 percentage points.
Ricardo Guimarães, the director of Confidencial Imobiliário said: “The exposure of the Algarve market to tourism and a predominance of British buyers may explain this somewhat volatile behavior, since this is a market which has prices that reflect investment and tourism, rather than being exposed to factors such as general housing demand”.
While overall the Algarve saw a less positive rise in house prices, there were areas that bucked this trend including Albufeira, Loulé and Tavira where increases were registered at 17 percent, 16.1 percent and 15.1 percent respectively.
The areas that saw the slowest levels of growth in the Algarve were highlighted as being Faro (11.8 percent), Silves (7 percent) and Lagos at 5.3 percent.