One place in particular springs to mind first when British holidaymakers think of Portugal: the Algarve. There is evidence that this stretch of coastline - almost as beloved of sun-seeking Brits as Southern Spain - is also falling victim to its own success as a tourist hotspot: sales prices were about 22 per cent lower than asking prices there last year, according to Knight Frank International.

Investors are now looking farther north, to the Silver Coast. Acclaimed somewhat unoriginally as “the new Algarve”, the area just south of Lisbon has undergone significant development but, unlike in the Algarve, there remain large areas of forest and unspoilt Atlantic coastline. Julian Cunningham, of Knight Frank International, says: “Over the past five years prices in the Algarve have soared. The Silver Coast is still quite an immature market from an investment point of view.”

Are you worried about the euro exchange rate? It may not be as bad as you think. It has made developers more willing to negotiate, and many experts expect the weakness of sterling to be short-lived. Charles Weston-Baker, of Savills International, says: “Firstly, these purchases take a long time. People fall for an area gradually. The pound may well move back towards its former value. ”

Developers in the Silver Coast are courting golfing and horse-riding enthusiasts. Quintas de Óbidos Country Club is one of five high-end projects between Óbidos town and the Silver Coast. It is next to Bom Successo, a large but stylish modern development, and not far from three other resorts - Praia D'El Rey, Royal Óbidos Spa & Golf Resort and Falésia D'El Rey. Quintas de Óbidos is the only one to lack an 18-hole golf course. Instead, it will have stables designed by the world's leading woman showjumper, Jessica Kürten. Prices for the 79 villas, which each have one-and-a-third-acre gardens, range from €1.5 million to €1.9 million, although payment is in instalments.

There are mid-range developments such as Herdade do Gizo, in Cuba in the Alentejo region. Properties there start from €325,000 for a two-bedroom bungalow on the farm estate of 25 homes. It claims to have a four-star level of service, although the clubhouse has only a basic restaurant and bar room. The stables hold the real appeal, as does the nearby town of Évora, with its Roman temple and historic cathedral, five minutes' drive away. Another project, Póvoa Dão, in the Dão valley southeast of Porto, is a rebuilt medieval settlement. Cottages have been built up from the foundations of ruined villas, giving the layout a charmingly higgledy-piggledy feel. The village was abandoned in favour of city living by all its inhabitants apart from one couple, who now run an organic farm at the retreat. The decor comprises lots of wood and stone. The starting price of €135,000 makes owning a property there a viable option for someone wanting a small slice of the good life.

For those who prefer city culture to outdoor pursuits, Lisbon is hard to beat. The proximity of superb beaches around Estoril, Guincho and Caparica makes the capital a buzzy alternative to the Algarve, spread across several hills dotted with viewpoints - miradors - from which to admire the maze of cobbled streets and colourful 17th-19th-century architecture. Apartment living is the norm, ranging from period flats on ancient cobbled lanes to sleek contemporary riverfront penthouses. Some older districts, such as Alfama, offer small houses but for larger family homes you'll need to look beyond the centre.

The most historic areas, Castelo, Alfama and Graça, are sought by people looking for characterful property with fine views. Barrio Alto and Bica offer a mish-mash of styles in the city's cultural epicentre. Lapa and Chiado are the most expensive areas - Lapa mainly residential, Chiado the home of upmarket shops. Prices range from €2,000 to €5,000 per square metre, says Paul Houston, of the agent Lucas Fox. An average two-bedroom apartment would be 100sq m, a good-sized one 3,500sq m. So €350,000 will get you something very nice.

Amoreiras Jardim Residence is a luxury new-build designed by João Luís Carrilho da Graça, a leading Portuguese architect. This glass-and-steel box sits amid much older buildings in Amoreiras, an upmarket enclave. The 13 spacious flats sport floor-to-ceiling windows and kitchens hidden behind sliding doors. Prices range from €45,000 for a 60sq m studio to €680,000 for a 120sq m two-bedroom.

Maexpa, another agent, has the Ajuda Palace Residence in Santo Amaro, a couple of miles from the heart of the city. Outwardly it is a beautiful 19th-century corner block, within which 11 large apartments have been carved out in ostentatious luxury. They are selling for €330,000 for 52sqm to €540,000 for a 73sqm penthouse. Even in swish Chiado, classic 100sq m two-bed apartments can be had for €300,000 and a 60sqm one-bed for half that.

For apartments needing renovation in old buildings you would assume 2,000sq m, Houston says. A place with character may well be found for less than €150,000.

Contact

www.herdadedogizo.com; www.povoadao.co.uk; www.qdo.pt; Lucas Fox Portugal (00 351 914 523 739, lucasfox.com); Maexpa International UK sales: (020-7960 6039, maexpa-international.co.uk)

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