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Best areas to buy and invest in property in Faro

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property investment Faro

Yes, the analysis of Faro's property market is included in our pack

The question of 'the best neighborhood to buy a property in Faro' does not have a one-size-fits-all answer.

Some of you are buying to live there, while others want to make the best investment possible. Individual preferences and circumstances matter.

That’s why the article below is covering every intent.

At Investropa, when we write a blog post or when we update our our property pack for Portugal, we want to bring solutions and cover different aims in a clear and organized way.

Enjoy the read, and please remember that we are not financial or investment experts. This article is for informational purposes only.

To improve the readability and user-friendliness of this article, we will categorize neighborhoods in Faro into various groups, including budget-friendly options, emerging hotspots, and areas with high rental demand, among others. Consequently, some neighborhoods may appear in multiple categories and be mentioned several times throughout the article.

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buying property in Faro

How is the real estate market in Faro?

The real estate market in Faro is currently quite dynamic, attracting a diverse range of buyers, particularly foreigners.

One of the key strengths of Faro is its unique blend of historical charm and modern amenities, something that's not commonly found elsewhere.

This city, known for its enchanting old town, stunning marina, and the Ria Formosa lagoon, offers a living experience that's steeped in cultural richness yet is comfortably contemporary.

People are drawn to buy in Faro for various reasons.

The city's warm climate and beautiful beaches are a significant draw, making it an ideal location for those seeking a sunny, seaside lifestyle.

Additionally, Faro's reputation as a safe, friendly, and welcoming community appeals to families and retirees alike. The presence of a well-connected airport and its proximity to other European destinations also make it a convenient location for international buyers.

Foreign interest in Faro's real estate is particularly high, driven by factors like the Golden Visa program, which offers residency to non-EU investors. This has made Faro an attractive option for those looking to gain a foothold in Europe.

Furthermore, the city's stable economy and the potential for rental income from the thriving tourism sector add to its appeal for foreign investors.

Regarding the dynamism of the market, one data point that stands out is the consistent year-over-year increase in property prices. This trend is indicative of the high demand and the city's growing popularity among buyers.

A unique aspect of properties in Faro is their architectural style. Many homes here feature traditional Portuguese elements, like azulejo tiles and terracotta roofs, blended with modern aesthetics.

This distinctive style not only adds to the city's charm but also ensures that properties retain a unique character that's hard to find elsewhere.

Looking to the future, several factors suggest that properties in Faro will continue to gain value.

The ongoing development of infrastructure, like improved transportation links and the expansion of cultural and recreational facilities, will enhance the city's livability.

Additionally, Faro's growing reputation as a hub for sustainable living and its commitment to preserving natural beauty, like the Ria Formosa lagoon, will continue to attract environmentally-conscious buyers.

Furthermore, the city's robust tourism sector suggests a strong rental market, which is a key consideration for investors.

Top neighborhoods in Faro to consider for living

Areas in Faro that are budget-friendly

If you're looking to buy property in Faro on a budget, there are a few neighborhoods you might want to consider.

Here is a summary table. Below, we will give more details.

Neighborhood Average Price per sqm Property Types Resident Demographics Strengths Weaknesses
Montenegro €2,000 Apartments, Townhouses Students, University Staff, Families Quiet, Educational Facilities Distance from Central Faro
Gambelas €2,100 Apartments, Villas Students, Academics, Families Educational Environment, Residential Vibe Limited Nightlife, Slightly Outskirt
São Pedro €1,900 Older Apartments, Townhouses Young Professionals, Older Locals Central Location, Cultural Vibrancy Older Buildings, Crowded Streets


Montenegro, known for its proximity to the Faro Airport and the University of Algarve, offers a unique blend of residential calmness and vital amenities.

In Montenegro, properties are generally cheaper because it's slightly away from the city center, which reduces demand. However, the growing interest in the area, partly due to the university, suggests a potential increase in property values.

The neighborhood mostly features apartments and townhouses in Montenegro, with an average price per square meter hovering around €2,000. Residents here are a mix of students, university staff, and local families.

The strength of Montenegro lies in its balance of quiet living and access to educational facilities, though its distance from central Faro and tourist spots can be seen as a drawback.


Gambelas, another area near the University of Algarve, is also known for its affordable housing options.

Prices are lower due to its location, being outside the immediate city center, yet the neighborhood is expected to see property value growth thanks to the university's expansion and improvements in local infrastructure.

Properties in Gambelas are varied, including apartments and villas in Gambelas, with average prices around €2,100 per square meter. The area is populated by students, academics, and families, offering a vibrant community spirit.

Gambelas's strengths include its educational environment and quiet residential vibe, while its distance from central Faro and limited nightlife options might be seen as negatives.

São Pedro

São Pedro, a more centrally located neighborhood in Faro, presents an interesting option for budget-conscious buyers.

The area is less expensive primarily due to older property stock and a denser urban layout. However, with urban renewal projects and its central location, São Pedro is poised for a rise in property values.

The neighborhood mainly consists of older apartments and townhouses in São Pedro, with an average price per square meter around €1,900. It is home to a diverse mix of residents, from young professionals to older locals.

São Pedro's strengths are its central location and cultural vibrancy, but the older buildings and sometimes crowded streets might not appeal to everyone.

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Areas in Faro that are popular and upscale

When looking to buy property in Faro, three neighborhoods stand out as upscale and popular choices. These neighborhoods each have their unique character and draw different types of residents.

Neighborhood Average Price per sqm Resident Profile Strengths Weaknesses
Vale do Lobo €5,000+ Affluent, celebrities Luxury amenities, golf courses High cost of living
Quinta do Lago €5,000+ Wealthy expats, retirees Exclusivity, safety Unattainable for many
Faro Old Town €3,000 - €4,000 Culture enthusiasts Historical charm, central location Limited parking, touristy

Vale do Lobo

This neighborhood is synonymous with luxury.

In Vale do Lobo, properties are expensive due to the high-end amenities and the prestigious golf courses. The average price per square meter in Vale do Lobo reflects the exclusivity, often exceeding €5,000.

The area is home to affluent individuals, including celebrities and business tycoons, who appreciate the private beaches and world-class golf facilities. Despite its high cost, Vale do Lobo remains popular due to its unique blend of luxury and natural beauty.

The main drawback is the high cost of living, which limits accessibility for average buyers.

Quinta do Lago

Another highly sought-after area, known for its luxurious villas and upscale lifestyle.

Properties in Quinta do Lago are pricey, with average prices per sqm also around €5,000. Its popularity is sustained by its reputation for exclusivity, safety, and high-quality amenities like golf courses and fine dining.

The residents are mostly wealthy expats and retirees.

While Quinta do Lago is set to remain popular among the elite, its exclusivity is its biggest weakness, making it unattainable for many.

Faro Old Town

A more culturally rich and historical area, this neighborhood offers a mix of traditional Portuguese architecture and modern conveniences.

Prices in Faro Old Town are slightly lower, around €3,000 to €4,000 per sqm, but still considered high. It attracts those who appreciate history and culture.

Its ongoing popularity is fueled by its unique charm and central location.

However, potential downsides include limited parking and the hustle and bustle of tourist activity.

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Areas in Faro that emerge as new hotspots

Let's explore these emerging neighborhoods in Faro that, according to our local partners and our customers, are getting quite a bit of buzz lately.

Neighborhood Average Price per sqm Resident Profile Strengths Weaknesses
Montenegro €2,000 Young professionals, families Affordable, peaceful Potential over-commercialization
Santa Bárbara de Nexe €1,500 - €2,500 Peace-seeking individuals Rustic charm, tranquility Limited amenities
Gambelas €2,000 - €3,000 Young professionals, academics Vibrant community, university proximity Lacks historical charm


Initially a quieter residential area, Montenegro is becoming increasingly popular for its more affordable housing options, with prices around €2,000 per sqm.

It's drawing in young professionals and families seeking a balance between urban amenities and a peaceful environment. The area has seen recent development, including modern housing and improved infrastructure.

While it's still more affordable than central Faro, prices are expected to rise as popularity grows.

Its main strengths are affordability and a growing community feel, but it could face challenges from increasing development and potential over-commercialization.

Santa Bárbara de Nexe

Once a rural village, it's now gaining attention for its tranquil lifestyle and stunning views.

Property prices in Santa Bárbara de Nexe are lower, around €1,500 to €2,500 per sqm, attracting those looking for a peaceful retreat. The area has evolved to include more modern amenities while retaining its rustic charm.

Its growing popularity might lead to a gradual increase in property prices, but it's expected to maintain its quiet, rural atmosphere.

The main appeal is the blend of traditional and modern living, though limited local amenities can be a downside.


Known primarily for hosting the University of the Algarve, Gambelas is emerging as a hotspot for young professionals and academics.

Property prices in Gambelas are relatively moderate, around €2,000 to €3,000 per sqm. The neighborhood's evolution from a purely student area to a more diverse community is increasing its appeal.

Prices in Gambelas are expected to rise steadily but remain more affordable than central Faro.

Its strengths include a vibrant, youthful atmosphere and proximity to the university, but it may lack the historical charm of other areas in Faro.

Make a profitable investment in Faro

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buying property in Faro