The country is more suited to those in search of a different lifestyle rather than profit and property buyers looking to make a quick buck could find better places to splash their cash than Portugal – homes generally appreciate in line with inflation and up to five per cent at the best of times. Careful research, however, could land you a home in an up-and-coming area with the added bonus of realistic rental income in some regions.

THE ALGARVE
General: The Algarve accounts for some 90 per cent of all property sales to foreign buyers in Portugal, thanks largely to its excellent year-round climate – which includes over 3,000 hours of sunshine – and its kilometres of golden, sandy beaches. Summer temperatures average out at around 25°C and winter temperatures at 12°C. The Algarve is also famous for its sporting opportunities and is a golfer's paradise with about 30 courses around the coast. The area east of Faro is very different to most of the Algarve. Here, development has spread more slowly.
 
The coastline is largely lined by stretches of tidal marshlands, almost to the Spanish border The area is part of the Rio Formosa National Park and the marshlands are protected by long sand flats, or ilhas. Access: Good – Faro is the gateway to the region. Well served by bmibaby, British Airways, Easyjet, Monarch and Tap-Air Portugal, with departures from eight UK airports. A new motorway, The Via do Infante, has drastically improved driving times along the Algarve and access from Spain.

Resorts: The small resorts along the coast have retained much of their character. The houses in the main are discreet in design, although larger properties are appearing.

Tavira – an appealing, working fishing port. Limited coastal apartments but surrounding countryside offers tranquility and the chance to pick up a rustic ruin. Four-bedroom villas from 220,000 euros and small 'ruins' from 50,000 euros. Faro – often overlooked as a second home market by those using the airport. The town centre is largely untouched by mass tourism and remains attractive. Two-bedroom apartments from 110,000 euros.

Vale do Lobo and Quinta do Lago – two of the Algarve's most exclusive, luxurious and spacious developments. Two-bedroom townhouses have recently been sellling for 675,000 euros and detached villas for three times that amount.

Lagos – numerous attractive and high quality developments on the coast might come as a surprise after penetrating the town's unspectacular outskirts. People come for the Algarve's oldest town and great beaches. The population booms from 20,000 to 200,000 in summer.

Olhao – the town has a north African appearance with strange cube-like houses that make it distinct from other towns. It is the largest fishing port on the Algarve. Ferries from here make the short trips to the ilhas of Armona and Culatra.  Everything radiates from the harbour with its many restaurants. There is a large, daily market and the local people are friendly and relaxed. A four-bedroom villa with a swimming pool costs from £294,000 to £433,000.

THE WEST ATLANTIC COAST
General: Cooler and with a less developed property market, the western Atlantic coast is divided into three regions, in which investment opportunities and/or the 'real' Portugal may be found. Access: Average – British Airways and TAP Air Portugal fly from some London airports to Lisbon and Porto, meaning nowhere on the coast is more than two hours from an airport.

Resorts: The Costa de Lisboa – home to Portugal's capital city, Lisbon, and fishing towns and ports. Not so much of interest for second home owners, hence the property market is limited.

The Costa da Prata – popular with holidaymakers and second- home owners. Obidos, a medieval town with white-washed houses, and Coimbra, the ancient capital of Portugal, are particular favourites.

The Costa Verde – runs from Porto to the Spanish border and is one of the country's most unspoilt and beautiful regions. Barcelos is amongst the most picturesque medieval towns in the region and the countryside to the north is perfect for off-the-beaten-track properties.

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Article first published in March 2006