Authored by the expert who managed and guided the team behind the Portugal Property Pack
Yes, the analysis of the Alentejo's property market is included in our pack
What will happen in Alentejo’s real estate market? Will prices go up or down? Is Alentejo still a hotspot for foreign investors? How is Portugal’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with local agents, property developers, and clients who buy properties in Alentejo, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Property prices in Alentejo's interior will rise more slowly than coastal areas due to limited urbanization
In the Alentejo interior, infrastructure development lags behind coastal areas.
With its lower population density, Alentejo sees less demand for property, especially in its rural parts. This slower growth in population means that real estate prices increase at a more gradual pace. The region's predominantly rural character, as noted in an OECD report, plays a big role in this trend.
Historically, property values in Alentejo's rural areas have appreciated more slowly than in coastal regions. In 2023, the average asking price in Alentejo was about €1,479 per square meter. Compare this to coastal hotspots like Comporta, where prices for a two-bedroom property start at €695,000. This stark difference highlights the higher demand and prices in coastal areas.
Urbanization in Alentejo remains limited, which means the interior will likely see a slower price increase compared to its coastal counterparts. This is partly due to the region's focus on preserving its rural charm and lifestyle, which doesn't attract the same level of infrastructure investment as bustling coastal areas.
For those considering a property purchase, Alentejo offers a more relaxed pace of life and a chance to invest in a region where prices are still relatively affordable. The slower development pace might appeal to those looking for a quieter, more traditional Portuguese experience.
Sources: OECD Report, Portugal Buyers Agent, Portugal Buyers Agent
2) More foreign buyers will seek retirement homes in Alentejo for its tranquility and affordability
Alentejo is quickly becoming a top choice for foreign retirees due to its peaceful environment and lower cost of living.
Imagine waking up to the sight of golden plains and green hillsides, far from the noise of city life. That's what Alentejo offers, with its tranquil landscapes and secluded beaches, making it a perfect escape for those looking to retire in peace.
When it comes to expenses, Alentejo is a smart choice. Living in Évora, for example, costs about €2,723 per month, which is significantly less than the €3,700 you'd spend in Lisbon. This means your savings can stretch further, allowing for a more comfortable retirement.
Rent is also more affordable here, adding to the region's appeal. The average cost of rent in Alentejo is lower than in other popular regions, making it an attractive option for those looking to settle down without breaking the bank.
Real estate in Alentejo is booming, with new developments tailored for retirees. These properties often feature eco-design and luxury amenities, catering to the tastes of foreign buyers who value sustainability and comfort.
The rise of remote work and a focus on sustainable living have further fueled interest in Alentejo. This trend is expected to continue, making the region a hotspot for those seeking a serene and eco-friendly lifestyle.
Sources: Portugal Buyers Agent, Vive Europe, eSales International, The Portugal News, Portugalist
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Portugal versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Rental yields for rural properties in Alentejo will drop as younger people move to cities for jobs
Rural properties in Alentejo are seeing a drop in rental yields as younger generations head to cities for jobs.
In Alentejo, the population has been shrinking by 0.72% annually, faster than the national average. This is especially true for those aged 15 to 34, who made up a quarter of the population in 2011 but only about a fifth in 2021. The younger crowd is moving to urban areas like Lisbon and Porto, where job opportunities and salaries are better.
Young adults, particularly those aged 25 to 34, are drawn to cities for career prospects, leaving fewer young people in rural areas. This shift has also led to an increase in young foreigners in urban settings. The real estate market in Alentejo is feeling the impact of these changes. While there's still demand for rentals, the supply is tight, pushing rents higher.
However, this situation might not last. With fewer young renters, the average property price of €1,479 per square meter in Alentejo might not sustain high rental yields. The younger population's decline is a key factor here. As more young people leave, the demand for rentals could drop, affecting rental income.
For those considering buying property in Alentejo, it's essential to understand these dynamics. The region's charm and tranquility are appealing, but the economic and demographic shifts are crucial to consider. The allure of city life is strong for the younger generation, impacting rural property markets.
Investors should weigh the potential for long-term rental income against these trends. The current rental market might seem promising, but the ongoing migration to urban areas could change the landscape. Understanding these factors is vital for making informed decisions about property investments in Alentejo.
Sources: OECD, The Portugal News, Portugal Buyers Agent
4) More foreign investors will enter Alentejo as its potential gains international recognition
Alentejo is catching the eye of foreign investors more than ever before.
In 2023, the Algarve region, which includes Alentejo, saw a significant rise in housing purchases by foreign buyers, with 29.9% of all housing sales going to those with tax residency outside Portugal. This surge is a clear sign that international interest in the area is on the upswing.
Alentejo is also basking in the glow of increased international media coverage. More articles and travel guides are spotlighting it as a new hotspot for real estate and tourism, which is boosting its profile among global audiences. This kind of exposure is crucial for attracting more foreign investors.
Real estate agencies like Goldcrest are honing in on foreign buyers, making the process of purchasing property in Alentejo smoother and more accessible. This targeted approach by agencies is a testament to the growing interest in Alentejo properties from international investors.
With more eyes on Alentejo, the region is poised to become a prime destination for those looking to invest in property. The combination of increased media attention and specialized real estate services is paving the way for more foreign investment in the area.
As international awareness of Alentejo's potential continues to rise, the number of foreign investors is expected to grow, making it an exciting time for the region. Alentejo's charm and investment potential are becoming hard to ignore.
Sources: Idealista, Portugal Buyers Agent
5) Alentejo will attract more long-term investors due to changes in property tax regulations
Alentejo is becoming a hotspot for long-term property investors, thanks to new property tax regulations.
Starting in August 2024, young adults under 35 can enjoy tax exemptions on their first home. If you're buying a property up to €316,772, you get a full exemption, and there's a partial exemption for homes valued between €316,772 and €633,453. This makes it easier for young buyers to step into the market.
Alentejo's property tax rates, known as IMI, are lower for rural properties, ranging from 0.8% to 2.4%. This is a bargain compared to Lisbon and Porto, where both property costs and taxes are higher. For context, the average property in Alentejo costs about €312,000, while in Lisbon, it's €536,100, and in Porto, €344,590.
The Portuguese government is also sweetening the deal with tax incentives for property investments in Alentejo. Reduced IMT rates for agricultural and rustic lands make the region even more appealing. These benefits are drawing in foreign investors, with many 2023 home purchases made by buyers from outside Portugal.
Alentejo's charm isn't just in its landscapes but also in its affordable property market. The combination of tax breaks and lower costs is a win-win for investors looking for long-term gains.
With these changes, Alentejo is not just a place to visit but a region where investors can see real potential for growth and stability.
Sources: Portugal Buyers Agent, EasyFX, Idealista
Get fresh and reliable information about the market in the Alentejo
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
6) More foreign buyers will seek agricultural land in Alentejo for organic farming ventures
Alentejo is catching the eye of foreign buyers interested in organic farming.
With the world leaning towards sustainable practices, organic farming is booming globally. Take the Netherlands, for example, where organic farmland has expanded significantly. This shift is making places like Alentejo more appealing.
In Europe, the appetite for organic products is growing. Italy's organic product consumption hit new records in 2023, pushing more investors towards organic farming. This trend is turning Alentejo into a hotspot for those looking to tap into this market.
Alentejo offers a perfect mix of mild winters and hot summers, ideal for various agricultural activities, especially organic farming. This climate advantage is a big draw for potential investors.
Another reason Alentejo stands out is its affordable agricultural land. Compared to other European regions, you can invest here without breaking the bank, making it a smart choice for newcomers.
Sources: CBS, American Forest Management, Food Times
7) More young families will move to Alentejo for affordable homes and a better lifestyle, affecting the local real estate market
Young families are flocking to Alentejo for its affordable housing and quality of life.
Compared to bustling cities like Lisbon and Porto, Alentejo offers some of the lowest median sales prices in Portugal. In 2024, house prices in the country dipped by 1.3%, and in Alto Alentejo, the median sales price for family homes was just 520 euros/m². This makes it a budget-friendly choice for families looking to settle down.
Living in Alentejo is not just about cheaper homes; the overall cost of living is lower too. While housing costs take up a significant portion of income, they are still more manageable than in urban areas. This affordability, paired with the region's stunning landscapes and improving infrastructure, makes it a magnet for young families.
The rise of remote work has also fueled this trend. With the freedom to work from anywhere, many are choosing Alentejo for its higher quality of life. The Alentejo Regional Programme 2021-2027, backed by EU funds, is set to boost infrastructure and amenities, making the area even more appealing.
Media buzz about Alentejo's lifestyle perks, like its scenic beauty and lower living costs, has caught the attention of young families. This has led to predictions of increased demand for family homes in the region, shaking up the local real estate scene.
As more families discover Alentejo's charm, the region is poised to become a hotspot for those seeking a balanced and affordable lifestyle.
Sources: Idealista, European Commission, eSales International, Global Residence Index, OECD
8) Rental yields in Alentejo's coastal towns will rise as short-term vacation rentals gain popularity
Alentejo's coastal towns are becoming a hot spot for tourists, boosting the demand for vacation rentals.
With more visitors flocking to the area, short-term rental listings on platforms like Airbnb and Vrbo are increasing. This trend suggests that property owners could see higher rental yields as more travelers choose these accommodations.
Alentejo's charm is drawing in tourists, and coastal areas are particularly popular. This surge in interest means vacation rentals are likely to have higher occupancy rates, translating to better returns for property investors.
As the allure of Alentejo's coast grows, property owners are in a prime position to benefit from the rising demand for short-term rentals. The region's appeal is not just a passing trend; it's a growing opportunity for those looking to invest in vacation properties.
With sustainable tourism efforts in place, Alentejo is not only attracting more visitors but also ensuring that the growth is managed responsibly. This balance between growth and sustainability makes it an attractive option for potential property buyers.
Investing in Alentejo's coastal towns could be a smart move, as the area is poised for continued growth in tourism and rental demand. The combination of natural beauty and increasing popularity makes it a promising location for property investment.
We have made this infographic to give you a quick and clear snapshot of the property market in Portugal. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Property prices in Alentejo's historic towns will rise as they gain popularity for cultural tourism and heritage preservation
The historic towns in Alentejo are seeing a noticeable rise in property prices as they become hotspots for cultural tourism.
While the Algarve has long been a favorite, Alentejo is now catching the eye of those interested in cultural and heritage experiences. This shift is partly due to government and EU investments in heritage preservation, which are making these towns even more appealing. These funds are not just for show; they are actively used to maintain the region's charm and authenticity, which is a big draw for potential buyers.
Alentejo is not just about old buildings; it's alive with cultural festivals and events. Wine tourism, in particular, has seen a 27% boost in 2023, attracting a wave of international visitors. This influx of tourists is not just good for local businesses; it's also sparking interest in the property market.
Imagine owning a piece of history in a town that's bustling with life and culture. The rise in tourism, especially from international visitors, is making Alentejo a desirable place to invest. Properties here are becoming more valuable as the area gains popularity, offering a unique blend of tradition and modernity.
For those considering a move or investment, Alentejo offers a unique opportunity. The combination of cultural richness and increasing property values makes it an attractive option. Whether you're drawn by the festivals, the wine, or the historic charm, there's something here for everyone.
Sources: The Portugal News, European Commission, Property Market Index Report Portugal 2024-2025
10) Property values in Évora will rise significantly as it becomes a center for education and research institutions
Évora is quickly becoming a key hub for educational and research institutions, which is set to boost property values.
With the University of Évora's enrollment numbers reaching 7,991 students by 2025, there's a natural uptick in housing demand as students seek accommodation. This surge in student numbers is a clear indicator of the city's growing educational appeal.
Portugal has seen a 55.5% increase in international students from 2015-2016 to 2020-2021, and Évora is no exception. This trend suggests a continued need for student housing, which is likely to push property values higher as investors and developers jump on the opportunity.
Évora's rise as an educational hub is not just a local secret; media coverage is shining a light on the city, attracting more students and researchers. This increased attention is making Évora a more attractive place to live and invest, with property prices rising by 2.3% in February 2024.
As Évora gains recognition, the city's real estate market is becoming more appealing. The combination of educational growth and media spotlight is creating a buzz that is hard to ignore, especially for those looking to invest in property.
With these developments, Évora is poised to become a hotspot for both education and real estate, offering a unique blend of opportunities for potential property buyers.
Sources: The Portugal News, Times Higher Education, Savills
11) Property prices around Alqueva Lake will rise as water sports and leisure activities become more popular
The Alqueva Lake region is becoming a hotspot for water sports and leisure activities, which is driving up property prices.
In 2023 and 2024, the Alentejo region, including Alqueva Lake, saw a surge in tourism, with overnight stays jumping by 7.3% from May to June 2024. This rise in visitors shows a growing interest in the area, often leading to higher property demand.
The variety of water sports, like boat rides, water skiing, and paddle SUP, is pulling in more visitors, making the area even more attractive. The development of infrastructure, such as the new marina near Amieira village and several nautical companies, is crucial. This setup not only supports tourism but also boosts property values as more people flock to the region.
Media attention on Alqueva Lake as a tourist destination has put it on the map, drawing in tourists and potential property buyers. Positive reviews on travel and lifestyle platforms have highlighted the region's charm, creating a buzz that attracts even more visitors. This growing interest is likely to push property prices higher as demand continues to rise.
Locals and investors are noticing the trend, with many seeing the potential for a solid return on investment. The combination of natural beauty and recreational opportunities makes Alqueva Lake a desirable place to own property. As more people discover the area, the competition for properties is expected to intensify.
With the ongoing development and increasing popularity, the Alqueva Lake region is poised for a property market boom. Those looking to invest in a scenic and active location should consider this area. The future looks bright for property owners in this emerging hotspot.
Sources: ASTO, Visite Vora, IPBeja Repository
Don't buy the wrong property, in the wrong area of the Alentejo
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
12) Rental prices in Alentejo's interior will stay steady with little change
The rental market in Alentejo's interior is expected to stay stable for several reasons.
First, the region isn't seeing much population growth. In fact, Alto Alentejo's population slightly decreased by 0.21% recently. This means there's less demand for housing, which helps keep rental prices steady.
New housing developments are also limited in this area. While Portugal is approving many new housing units, these aren't popping up in Alentejo's interior. This lack of new supply means there aren't sudden changes in available properties, keeping prices from fluctuating.
Most of the demand for rentals in Portugal comes from locals, not tourists. In Alentejo's interior, the rental market isn't driven by tourism, unlike in more popular areas. This local demand helps maintain stable rental prices.
In Alentejo, the charm lies in its quiet, rural lifestyle, attracting those who prefer a slower pace. Without the hustle and bustle of tourist hotspots, the rental market remains calm and predictable.
For anyone considering a move to the countryside, Alentejo offers a peaceful environment with the added benefit of consistent rental prices. It's a place where you can enjoy the tranquility without worrying about sudden rent hikes.
Sources: INE, The Portugal News, Portugal Buyers Agent
13) Rental prices in Alentejo's historic towns will increase as more long-term residents seek cultural experiences
Alentejo's historic towns are becoming a hotspot for those seeking rich cultural experiences.
With its stunning coastlines and natural parks, Alentejo Litoral is a magnet for culture lovers. The region's charm is pulling in more long-term residents who are eager to soak up its unique blend of history and nature. This influx is not just about the scenery; it's about the vibrant cultural life that Alentejo offers.
The demand for rental properties is climbing as Alentejo's cultural scene flourishes. The OECD report points out the region's impressive cultural capital, with numerous museums and galleries. These attractions are not just for tourists; they are drawing in new residents who want to be part of the cultural buzz, pushing up the need for housing.
Property prices in Alentejo are on the rise, with a 13.4% increase year-on-year as of April 2024. This trend suggests that rental prices are following suit. As more people are captivated by Alentejo's cultural offerings, the demand for rentals is set to grow, making it a promising area for property investment.
The economic impact of cultural tourism is significant, as highlighted by the OECD. This boost in cultural tourism is a key factor in the rising rental prices, as more people are drawn to the region's unique experiences. Alentejo's cultural appeal is not just a passing trend; it's a growing movement that is reshaping the local real estate market.
Sources: OECD Report, Global Property Guide
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.