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Yes, the analysis of the Alentejo's property market is included in our pack
Considering buying real estate in The Alentejo? You're not alone!
Many people are charmed by the Alentejo's rural tranquility and dream of owning a traditional farmhouse or a modern country estate there.
Is it a wise investment, though? Are property prices increasing in the Alentejo? Is it expensive? Should I buy property in Évora or Comporta? Are there any secret taxes? Where can you get a yield above 7%?
We've solved it for you.
The Investropa team has really dug into this market. Actually, we have condensed all our findings in a pack. Get it now.
In this article, we're happy to share useful information with you.
How's the property market in the Alentejo?
When evaluating the strengths of a property market, everyone has their own opinion. We do things differently - we rely on data and actual facts.
Types of properties
In Alentejo, you can find a variety of properties for sale.
These include charming countryside homes surrounded by rolling hills and vineyards, historic townhouses with traditional architecture in quaint villages, spacious farmhouses with expansive land for agricultural pursuits or outdoor activities, and modern apartments in bustling towns, offering a mix of rural tranquility and urban convenience.
Whether you're seeking a peaceful retreat, a cultural experience, or a blend of both, Alentejo offers a range of property options to suit your preferences.
Buying vs Renting
(If you want to live there yourself and not rent it to others)
If the Alentejo region in Portugal is your destination of choice, you may be thinking about the advantages of buying versus renting a property in this tranquil and rural area.
Usually, buying is better than renting in the Alentejo due to the low property prices and the potential for price appreciation.
Nevertheless, if flexibility is your main concern, renting is the recommended choice.
Housing prices in the Alentejo
On average, according to the updated data from Statistics Portugal, purchasing a property in the Alentejo would cost you around $4,500 per square meter.
Clearly, there is a substantial range. A property in the Alentejo might have a different price per square meter than a house in Évora. We actually give you a more detailed breakdown in our pack for buying property in the Alentejo and in Portugal.
To give you a sense of scale, it means that, instead of buying an apartment in Paris or London, you can afford 3 properties in the Alentejo.
Also, housing prices in the Alentejo are 25% cheaper than in Lisbon.
The most expensive places in the Alentejo are probably the coastal cities, such as Vila Nova de Milfontes, while the inland areas are generally the cheapest.
Trends
First and foremost, we have to acknowledge that Portugal is, today, one of the most stable countries in the world. The last Fragile State Index that has been reported for this place is 27.5.
Keep this in view when pondering the viability of buying a property in in the Alentejo.
Also, according to the International Monetary Fund (IMF), Portugal's economy is expected to soar by 7.9% in the coming 5 years, resulting in an average GDP growth rate of 1.6%.
If you intend to invest in real estate in the Alentejo it's a good thing because when the economy grows, people tend to become wealthier, which usually results in higher housing prices.
Also, in Portugal, the average GDP per capita has changed by 5.0% over the last 5 years. It's a solid number.
This is a strong positive signal: housing prices in the Alentejo might become more expensive in 2024 and later on.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Portugal right now.
Buying property in the Alentejo
Buying real estate in the Alentejo can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in the Alentejo and in Portugal.
Buying process
In our pack, we've explained the entire buying process in detail. We've provided clear information about prices and yields based on the area, guidance on negotiating the price, and options for securing a mortgage.
Now, we're offering you a simpler version, step-by-step, to make it easier for you to grasp.
This is the step-by-step process to purchase a property in Alentejo, Portugal:
- Research Alentejo's property market and regional laws.
- Engage a local real estate agent familiar with Alentejo.
- Define your budget and property preferences, considering unique Alentejo features like cork oak forests and traditional estates.
- Visit potential properties, keeping in mind the region's rural charm and scenic landscapes.
- Conduct a thorough inspection, considering the impact of Alentejo's hot summers and mild winters.
- Hire a solicitor experienced in Portuguese real estate to review documents like the Caderneta Predial (property registration) and the Escritura (deed).
- Negotiate the purchase price, considering Alentejo's specific market trends.
- Sign a preliminary contract (Contrato de Promessa de Compra e Venda) outlining the terms and conditions.
- Pay a deposit (sinal) to secure the property, usually 10% of the purchase price.
- Finalize financing if needed, exploring mortgage options available in Portugal.
- Complete the notarial deed (Escritura) with the presence of a notary and the buyer and seller, transferring ownership officially.
- Register the property in your name at the local Land Registry (Conservatória do Registo Predial), finalizing the purchase process in Alentejo.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Portugal.
Make a profitable investment in the Alentejo
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Where to find a property
Explore these websites to find properties in Alentejo.
- Casthelana Real Estate - A real estate agency specializing in property sales and rentals in Porto, Portugal, offering a variety of apartments and houses.
- Home Lovers - A real estate website offering properties for sale and rent in various areas of Portugal, including Lisbon, Porto, Cascais, Comporta, and Madeira.
- Idealista - A property website with over 160,769 properties for sale in Portugal, including popular regions like Algarve, Lisbon, and more.
- Portugal Homes - A real estate agency offering a wide range of properties for sale in Portugal, including options for Golden Visa properties.
- Properties in Portugal - Browse through more than 40,000 properties for sale, including apartments, villas, land, and commercial properties.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Portugal.
Which properties for which budget?
As mentioned before, the average price per sqm in the Alentejo is $4,500. A 1-bedroom property of 60 square meters would cost approximately $270,000, and a 2-bedroom property of 85 square meters would cost approximately $383,000.
However, prices will change based on both the property itself and its location.
The prime locations in the Alentejo typically come with elevated housing prices. If you're thinking about Comporta, an apartment could cost you around $520,000, whereas a condominium in Troia might be priced at $480,000.
Still, some spots are more wallet-friendly. You could locate a property in Santiago do Cacém for $210,000, or you may find a property in Vila Nova de Milfontes for just $170,000.
We give more details about property types and areas in our full pack for buying property in Portugal.
Risks and pitfalls
Here are the main pitfalls when buying a property in the Alentejortugal:
- Protected areas: Check if the property is within a protected natural zone with strict building regulations.
- Cork oak regulations: Ensure compliance with restrictions on cork oak tree removal, a protected species.
- Agricultural subsidies: Verify eligibility for subsidies, which may have specific criteria and limitations.
- Cork industry reliance: Be cautious of properties relying solely on the cork industry, susceptible to market fluctuations.
- Cultural heritage restrictions: Historic properties may face limitations on renovations to preserve heritage.
- Summer droughts: Understand water scarcity during dry seasons and potential irrigation challenges.
- Limited amenities: Some rural areas lack access to advanced healthcare or educational facilities.
- Tourism impact: Proximity to tourist hotspots may affect property prices and rental potential.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Portugal Property Pack
Living in the Alentejo
The life in the Alentejo is peaceful and tranquil, with plenty of outdoor activities, local festivals, and beautiful scenery, making it an ideal place to buy a property.
Cost of living
The cost of living in the Alentejo is relatively low compared to other regions in Portugal. Prices for food, housing, and transportation are generally low, making it an attractive area for people looking for a more affordable lifestyle.
Here are some examples to better understand the cost of living in Alentejo:
- A bottle of local Alentejo wine: €10.
- Rent for a charming house in Évora's historic neighborhood: €600 per month.
- Regional dish "Migas" for two at a traditional restaurant in Beja: €20.
- Monthly water bill for a typical home in Elvas: €30.
- Café Delta coffee (250g): €3.50.
- Local artisanal pottery from Redondo: €25 per piece.
- Monthly membership at an Alentejo equestrian club: €50.
- Entrance fee to the Monsaraz Castle: €5.
Areas and spots
We want to show information in an easy-to-understand way. So, we made a table that lists the different parts of Alentejo. For yields, prices and rents, check our property pack.
| Place | Description | Strengths | Weaknesses |
|---|---|---|---|
Évora | Évora is a UNESCO World Heritage city with well-preserved historical architecture, attracting tourists and offering a strong rental market. It has a growing university presence, making it appealing to students and young professionals. | Rich historical and cultural heritage, strong tourism, steady rental demand, and a vibrant student population. | High property prices due to demand, seasonal tourism fluctuations, and limited potential for new developments within the city's historical center. |
Comporta | Comporta is a coastal gem known for its beautiful beaches, attracting high-end tourists and investors looking for luxurious vacation properties. The area's strict development regulations help maintain its natural charm and exclusivity. | Stunning natural landscapes, luxury property market, premium rental income during peak tourist seasons. | Limited availability of properties, high initial investment costs, and vulnerability to fluctuations in the luxury tourism market. |
Portalegre | Portalegre offers a more affordable property market with untapped potential, attracting budget-conscious investors. The town's location near the Spanish border enhances its accessibility and commercial opportunities. | Affordable property prices, potential for growth and development, strategic location for cross-border business. | Less established tourism industry, slower property appreciation compared to larger cities, limited international exposure. |
Monsaraz | Monsaraz is a charming medieval village perched on a hilltop, offering breathtaking views of the surrounding countryside. Its authenticity and tranquility attract tourists and property buyers seeking a peaceful retreat. | Unique and picturesque setting, strong demand for holiday rentals, potential for boutique hospitality ventures. | Restricted real estate supply, limited commercial activities, and distance from major urban centers. |
Elvas | Elvas is a fortified city with historical military significance, earning it a UNESCO World Heritage status. Its strategic location and architectural beauty make it attractive to investors interested in heritage properties and cultural tourism. | Historical value and recognition, potential for heritage-themed accommodations, close proximity to the Spanish border. | Preservation restrictions, limited modern amenities, and a niche market for heritage-focused properties. |
Arraiolos | Arraiolos is renowned for its traditional handicrafts, especially its exquisite embroidered rugs. The town's authenticity and artisanal heritage make it appealing to investors seeking cultural and craft-based tourism opportunities. | Unique craft tourism potential, peaceful rural environment, traditional appeal for property buyers. | Limited property inventory, seasonal tourism patterns, and dependence on craft-related economic activities. |
Life in the Alentejo
The Alentejo is an economically important region of Portugal, known for its agricultural production and tourism industry. It is also a popular destination for retirees due to its sunny climate and low cost of living.
What expats usually like the most in the Alentejo is its laid-back lifestyle and stunning natural landscapes, such as the rolling hills and golden beaches.
Access to healthcare in the Alentejo is generally good, with a strong public healthcare system and a wide range of private healthcare providers.
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Renting out in the Alentejo
If you're considering purchasing property solely for renting and earning income, you'll find valuable information in this section.
Long-term
According to the data reported by Wikipedia, the home ownership rate in Portugal is 78%, which is average.
When people buy in the Alentejo it's usually to live there, and not to rent out.
If you decide to rent out long-term, you might want to target people who are looking for a rural and relaxed lifestyle with access to nature and outdoor activities. Those looking for a slower pace of life and a lower cost of living will be especially interested in the Alentejo region.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Farmhouse in Évora | Nature lovers and retirees | Rural setting and historical charm | $900 - $1500 |
Apartment in Beja | Professionals and families | Close to amenities and workplaces | $700 - $1100 |
Cottage in Monsaraz | Artists and tourists | Picturesque views and cultural experiences | $800 - $1300 |
Townhouse in Portalegre | Retirees and history enthusiasts | Historic town center and tranquility | $750 - $1200 |
Villa in Costa Vicentina | Surfers and beachgoers | Proximity to beautiful beaches | $1000 - $1600 |
House in Alcácer do Sal | Families and nature enthusiasts | Riverside location and outdoor activities | $850 - $1300 |
Apartment in Elvas | History buffs and retirees | Close to historical sites and amenities | $700 - $1000 |
Now, you will probably ask us about the yields. Unlike other places, giving you an average rental yield for the Alentejo is though. The region is quite varied. For example, rental yields in Évora and Beja are quite different from those in lesser-known villages.
Finally, know that, in Portugal, the taxes will be around 27-30% of the rental income.
Short-term
You could also decide to rent short-term to tourists looking to explore the region's many historical sites, or to outdoor enthusiasts seeking to take advantage of the region's natural beauty.
If you decide to go with that option, look for properties in the cities of Évora, Beja, and Portalegre, as well as the coastal towns of Sines, Vila Nova de Milfontes, and Zambujeira do Mar. These areas have a high demand for short-term rentals and have some of the best properties in the region.
Is it worth buying real estate in the Alentejo then?
Certainly, when it comes to buying a property in the Alentejo, Portugal, it's a fantastic choice for those who crave a peaceful, rural lifestyle amidst stunning landscapes.
If you dream of waking up to rolling hills and vineyards, historic townhouses in quaint villages, or spacious farmhouses, the Alentejo offers it all. The region's lower cost of living compared to other parts of Portugal is a significant advantage, making it appealing to retirees and budget-conscious individuals.
Plus, the potential for property price appreciation in the future due to Portugal's stable economy adds to its allure. However, this decision may not suit those seeking flexibility, as owning a property ties you to a specific location.
Moreover, if you're on a tight budget or looking for a high-liquidity investment, you might find the Alentejo less accommodating. Seasonal tourism fluctuations and property-specific risks, such as strict regulations or reliance on the cork industry, can also make it a riskier choice.
Furthermore, limited amenities in some rural areas may be a drawback for families or those with specific healthcare or educational needs. It's essential to weigh your personal preferences and financial circumstances carefully, seek local expertise, and assess your long-term goals before taking the plunge into Alentejo's property market.
In summary, buying property in the Alentejo is a wise choice for those seeking a tranquil, affordable, and potentially profitable lifestyle. However, it's not the right fit for everyone. If you're looking for flexibility, have a limited budget, or prioritize high liquidity in your investment, you might want to reconsider.
The Alentejo's appeal lies in its rural charm and natural beauty, but it comes with specific risks and limitations that require thorough consideration before making the leap into property ownership in this picturesque region.
Make sure you understand the real estate market in the Alentejo
Don't rush into buying the wrong property in Portugal. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
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