East vs West Algarve for highest property ROI
The Algarve has long been one of Portugal’s top destinations for property investment, offering sunshine, beaches, and strong rental yields. However, investors often face the question: is the East or West Algarve better for returns?
While both regions offer attractive opportunities, the nature of the investment and the target market can influence which side of the Algarve is more suitable.
The case for East Algarve
The East Algarve, particularly around towns like Tavira and Olhão, tends to be quieter and more traditional. The area is known for its unspoiled coastline, authentic Portuguese charm, and relatively lower property prices when compared to the West.
For investors seeking long-term appreciation and lower entry costs, this region remains appealing. There is also a growing interest in second homes and holiday lets due to the calm atmosphere and cultural richness. Areas such as Tavira have seen steady growth, with rising demand for everything from properties for sale in eastern algarve to modern apartments close to the coast.
Rental yields here may be slightly lower compared to the West, but the potential for capital appreciation remains strong. This is especially true as infrastructure improves and more international buyers turn to the Eastern side for value-driven purchases.
The case for West Algarve
The West Algarve includes vibrant areas such as Lagos, Luz, and Sagres. It is more developed in terms of tourism and expat communities, with a wider selection of resorts, golf courses, and international schools.
This side of the region is often favored by those looking for stronger short-term rental income. The beaches are dramatic, the surf culture is active, and the tourist season tends to be longer. Investors looking to tap into the luxury rental market often focus here, especially around Lagos where there is high demand for villas for sale in Lagos, Portugal.
Although property prices in the West are higher, the return on holiday lets and seasonal rentals can justify the cost. Moreover, the resale market remains healthy due to consistent international interest.
ROI comparison: What investors should know
When it comes to return on investment, the West Algarve generally offers stronger short-term rental income due to higher tourist footfall and established infrastructure. However, the East Algarve provides better value and potential for long-term appreciation, particularly in emerging hotspots that are gaining attention.
Ultimately, the right location depends on your investment goals. If you’re seeking immediate rental returns, the West may suit you. If your strategy is to buy and hold, banking on future growth, then the East could offer the best path forward.
Regardless of region, the Algarve continues to outperform much of the European market in terms of climate resilience, lifestyle appeal, and real estate stability.