The Impact of Portugal’s Recovery and Resilience Plan on Properties in Algarve, Portugal

Portugal’s Recovery and Resilience Plan is driving growth in the Algarve real estate market. Key areas like Lagos and Carvoeiro are seeing rising demand and value.

By LiveAlgarve on 2nd May 2025 - 3-4 m. reading time 

Portugal’s Recovery and Resilience Plan, Plano de Recuperação e Resiliência (PRR), has already made significant strides in advancing the country’s economic recovery, with €22.2 billion (€16.3 billion in grants and €5.9 billion in loans) allocated to various sectors. This strategic initiative, aimed at enhancing Portugal’s infrastructure, public services, and economic resilience, presents a promising future for the Algarve real estate market. 
 
As a result, the region is poised to attract greater investment, especially in key locations such as Lagos, Carvoeiro, and Praia da Luz.

Economic Recovery and Real Estate Growth

A disbursement of €7.4 billion to date represents 35% of the total approved funding, signifying substantial progress in the nation’s economic recovery. This funding has been allocated across a range of sectors, including municipal authorities, public companies, and education. As these funds continue to improve public services and infrastructure, the Algarve stands to benefit from enhanced connectivity, urban planning, and overall attractiveness to both national and international investors. In addition, Portugal's economic growth is projected to be around 2% on average until 2028. After a slowdown to 1.8% in 2024, growth is expected to reach 2.4% in 2025 and 2.1% in 2026. 

For those considering properties in Algarve Portugal, this economic recovery is expected to have a direct positive impact on property values, particularly in areas such as Lagos, Carvoeiro and Praia da Luz, areas which have already been witnessing noticeable increases of late. 

Infrastructure Enhancements and Increased Property Demand

As part of the PRR, a substantial portion of the funds is being allocated to infrastructure projects that will improve public services, transportation networks, and urban development. These enhancements are particularly important for high-demand areas such as the Western Algarve, where proximity to beaches, golf courses and marinas significantly elevates the value of real estate.

The ongoing infrastructure improvements are expected to make these areas more accessible and appealing to buyers, both domestic and international. Consequently, properties in these prime locations are likely to see an increase in demand, driving up property values. Investors looking to purchase Algarve property can anticipate strong potential for long-term capital appreciation.

Conclusion

Portugal’s PRR is driving substantial improvements in the country’s economic and infrastructure landscape. As these developments unfold, the Algarve real estate market stands to benefit significantly, with areas like Lagos, Carvoeiro, and Praia da Luz becoming increasingly desirable locations for both investors and homeowners. For those interested in purchasing Algarve property, the combination of economic recovery and strategic investments in the region makes now an ideal time to invest.

As the Algarve continues to evolve into a hub of economic and infrastructural growth, it remains one of the most attractive real estate markets in Europe. This year continues to be a prime time for investors looking for high-value properties in one of the most desirable regions of Portugal.