In the game of word association, “Algarve” goes with “golf” like “Pope” goes with “Catholic”. On Portugal’s sunny south coast, the most famous residential developments are more renowned for their golf courses than the real estate that surrounds them. But Chitra Stern has decided to break the mould on a craggy bit of coast near Sagres, in the wild terrain of the Parque Natural do Sudoeste Alentejano e Costa Vicentina.
“Beach resorts are few and far between,” Stern explains. “Whereas the Algarve has 26 golf courses at the moment, with 22 more in the pipeline.”
She and her husband, Roman, who she met when they were both management consultants, have also decided that it “makes sense to be expensive and exclusive” in their Martinhal Resort development. Its 140 houses, villas and flats will have design input from Conran & Partners, and the hotel, spa and beach club will be run by Four Winds Resorts, whose UK establishments, such as Woolley Grange in Wiltshire, cater for moneyed couples who don’t want to compromise on style or luxury just because they have children.
With prices ranging from about £340,000 for a two-bed townhouse to £430,000 for a three-bed house with its own garden, even stylish couples with young children and a designer lifestyle to maintain might find it a bit of a stretch: but here comes Stern’s other brainwave. Buy the property and lease it back to the management company to rent out. The buyer gets four weeks’ use of the property each year. The developer bears the condominium charges and maintenance costs of the 90 properties within the leaseback scheme and guarantees a 4% return for 10 years.
Stern is confident that Martinhal’s unique location at the far end of the Algarve — now only 90 minutes from Faro airport since the motorway’s latest westward push — will ensure capital growth. If that pans out, this would be an enticing scenario, especially for buyers who want an overseas bolt hole now but have neither the full means to pay for it nor much free time to spend there.
Near Carvoeiro, another complex designed for buyers who don’t want the commitment, hassle or cost of a full-time residence is taking shape. Quarter-freehold shares in one- and two-bed flats at Vale d’Oliveiras start at just above £50,000, rising to £73,000.
It’s a well thought-out set-up: each property is furnished, from television and sound system down to the last teaspoon, in inoffensive if boring four-star hotel style, with four sets of lock-up storage space where owners can stash away their personal belongings. The low-rise blocks radiate from a central hub, where laundry and maintenance facilities are located in an underground complex.
There will be a hotel, spa, communal pool, restaurants, business suite and shops. If you can’t take all your annual 13 weeks on the time-slot roster that rotates on a four-year cycle, the management company will organise holiday rentals.
Martin Shaw, chairman and chief executive of Lloyd’s broker Cooper Gay & Co, has paid £73,000 for a quarter-share in a two-bed flat at Vale d’Oliveiras. “I’m fighting a rearguard action with my wife, Pam, who wants a property abroad. But I say, why? You’ve got maintenance, security, the garden, the roof and you’ve always got to go there. I don’t want that — but I don’t want a timeshare. The share of the freehold at Vale d’Oliveiras means there’s value in it.”
Although he has a nagging suspicion that his wife might be planning to use the flat as a base from which to hunt for a more substantial property, Shaw can’t see the need. “I think we’ll go for a few weeks a year, maybe with another couple, and my grown-up children will use it. And I might rent it out. It’s a very interesting package. The maintenance costs aren’t high (about £1,700 a year) and I think it will go up in value. There are cheap flights to Faro, the motorway, sunshine.”
Shaw is not worried about the rural tranquillity of Vale d’Oliveiras being ruined by more development close by — at least, not on his side of the 30-acre plot, which overlooks a neighbouring golf course. But elsewhere, the Algarve is being developed at a pace which even the local estate agents can’t keep up with.
“Oh my God!” exclaims Filipe Rocheta, of the Prestige Property Group, as we approach the small fishing village of Burgau, near Lagos. “I don’t remember those flats. It looks like Spain!” Flats and townhouses are springing out of the muddy ground, threatening to overwhelm the quiet character of the village.
It looks like business is booming in the Lagos area. Sales director Paul Cotterell has expanded his staff at Casas do Barlavento estate agency from two to 14 to keep up with the demand.
“One-bedroom flats are a thing of the past,” he pronounces. “People now want two bedrooms-plus. The market between €165,000 and €500,000 (£113,000- £340,000), that’s where we’re busy.”
From among the plethora of development properties — new and resale — that he and Rocheta have on their books, you can get a four-bed villa with pool near Meia Praia for £290,000 and a brace of adjoining three-bed villas with a shared pool for £355,000. A three-bed flat at Meia Praia, built in 2003, is on at a little less than £240,000.
Despite the abundance of properties in the “near west” Algarve, “off-plan is the way forward”, says Cotterell, who claims “anyone who’s bought off-plan is on a massive profit.”
Professor Michael Ball, who analyses overseas markets for the Royal Institution of Chartered Surveyors, is less excited. Demand for Algarve property, he says, dropped dramatically in 2003, when Portugal introduced legislation that was seen to penalise overseas owners who had bought through offshore companies. Now “there are signs of a slow recuperation”, dependent “on the course of UK and northern European economies”.
Stuart Law, managing director of Assetz property investment advisers, says reliable market information for the Algarve is hard to come by, but that the overall Portuguese market went up by 10% in 2003 and 7% in 2004. “We anticipate about 7% for 2005 when the figures come out. It’s not an investor-driven market — it’s a stable destination.”
As you head east to the airport, prices rise, especially in the “golden triangle” between Faro, Albufeira and Loule, but as Tim Conniff says, “It’s not pioneer country. This place has taken years to get its infrastructure. It’s a high-end place.”
Conniff, a developer, has built himself a magnificent new home behind high white walls on one of Almancil’s exclusive lanes. From the drive where he parks his black Hummer to the pool and landscaped gardens with a view down the hill to the sea, it’s 7,500sq ft of architectural bravado and state-of-the-art toys, including traditional vaulted brick ceilings, remote-controlled lighting, a home cinema, vast bar, gym and “play area” — reached from the double-height main living room by a glass lift hidden behind a traditional carved wooden door. A tropical fish tank separates the sleeping area from the en-suite in one of the property’s six bedrooms.
Eager to move on to their next project, Conniff and his wife, Kelly, have put it on the market for £2m through Quinta Properties. If it were a few miles closer to the coast, in Quinta do Lago, he could ask even more. A sprawling collection of distinct neighbourhoods, golf courses and an elegant little shopping mall, its origins are lost in the very dawn of the Algarve as a sunshine playground, and its priciest houses can change hands for up to £5m. These are on the heights overlooking the Formosa river, a protected area rich in bird life, separated from the ocean by a ridge of dunes. Here, on a triple plot, Denis O’Brien, the golf resort’s owner, is building himself a home the size of an out-of-town supermarket, just along from the Benetton family’s modernist dark glass and white concrete 1980s palace.
All over the best areas of Quinta, says Alison Hojbjerg, of Quinta Properties, people are looking to buy “tired” 30-year-old houses to knock them down and rebuild to the latest specifications. Though this market will only really pick up when the vendors realise they will have to accept “plot prices”.
“What my clients are after is either plots or new-build houses where they don’t have to do anything,” she says. We take a whistle-stop tour of houses about the £2.5m mark — a blur of pools, terraces, marble floors, massive en-suites, double-height living areas, underfloor heating, golf-course views There are cheaper options. Villas in the Pinheiros Altos area — home to football legend Alan Shearer and music, ahem, legend Brian Bennett of the Shadows — start at about £1.4m, though you can get a two-bed flat near the golf clubhouse for £380,000 or a three-bed semi with a plunge pool for £500,000 — and these prices include golf club membership.
Two-bed, split-level houses with large terraces and use of a communal pool can be had for about £440,000. “We used to sell these at £575,000,” says Hojbjerg, explaining that the recent offshore company upheaval depressed the market by up to 25%, though it’s “nearly back to where we were”.
And while Quinta and the rest of the golden triangle still command a premium for what Rocheta calls the area’s “mature infrastructure” — mature, in this case, includes Michelin-starred restaurants and London-priced hairdressers — there are 80 miles of Algarve coast from Faro to the wilder shores of the west, offering an increasingly varied selection of property options — with even the chance of the odd game of golf.
Vale d’Oliveiras, 01202 765 011, www.valedoliveiras.com
