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Heard of Algarve? It's red-hot for golf real-estate opportunities

By Tim McDonald, Contributor

Real-estate Investors in the Algarve

On the southwest tip of Europe, in the southernmost part of Portugal, lies the province of Algarve.

Most American golfers have probably never heard of it, but Europeans and golf-tour operators certainly have. The International Association of Golf Tour Operators (IAGTO) recently voted Algarve its top golf destination for the second year in a row, ahead of California, Dubai and Costa Brava in Spain.

If you haven't heard of Algarve, you might soon. The region will be promoting its golf on CNN, for one.

Arnold Palmer has heard of Algarve, as did Robert Trent Jones Sr.; both designed courses there. Algarve hosted the World Golf Cup in 2005 at the Palmer-designed Victoria Golf Course in Vilamoura, said to be the longest course in Portugal at 6,560 meters.

Henry Cotton put golf on the map at Algarve, designing the first grass course there in the mid-1960s. He lived there for 30 years and designed two other Algarve tracks.

For three decades, golf courses bloomed on Portugal's south coast, catering to northern Europeans. And while Portugal's real-estate business is fairly stagnant these days, Algarve's is booming. One firm has sold more properties in the first three months of 2006 than it did all of last year. Lagos and Tavira are seeing a lot of action, as are Luz and Cabanas.

Most of the buyers - about 90 percent - are non-Portuguese, many of them Irish, taking advantage of generous tax benefits. The properties are mostly high-quality homes selling for more than 350,000 euros.

The Irish aren't alone; foreign sports stars and businessmen are also investing, encouraged by Algarve's role hosting England's pre-World Cup training. In addition, foreign home owners enjoy the same legal rights as nationals. Portuguese newspapers are reporting that Donald Trump is set to invest in the Castro Marim Golf and Country Club.

Soccer star Luis Felipe Vieira is also said to be investing 200 million euros in a development that will include a five-star hotel, a tourist village and golf course in Castro Marim. And Rui Costa of the national soccer team is an investor in the Costa de Cabanas, in eastern Algarve, a typical development. Situated on a natural blue-water lagoon adjacent to an 18th-century fort, it includes 50 townhouses and 218 apartments. Apartments start at 185,000 euros, villas at 325,000 euros.

Castro Marim
Algarve is a natural for year-round golfing, with mild weather and 24 courses, most of them close to the coast. The terrain varies from the steep hillsides of Parque de Floresta to flat Salgados, but most courses have gently undulating fairways through pines.

As good as eastern Algarve is for real-estate investment, western Algarve might be better. Returns on investment there are far outpacing those of the better-known east, according to several real-estate companies, mostly because of significant investment in infrastructure and development, in particular the opening of the Via do Infante motorway in 2004.

And in contrast to what happened when development fever struck the Spanish coast, strict planning rules have been put in place here to preserve the traditional Portuguese feel and cultural heritage. The result is a more affluent region and more upmarket property.

The increase in foreign homebuyers has both escalated the economy and stabilized it.

As for the golf, there are some fine courses, like the rolling, hilly Parque de Floresta in the western part of the province, and Boavista, with its fairways lined with fig, olive, pines and palm trees and the par-5 16th hole, said to be one of the longest in Europe. Vilamoura Pinhal was designed by Jones Sr., and Colin Montgomerie holds the course record of 63 at Quinta do Lago, which has hosted the Portugal Open.

Tim McDonaldTim McDonald, Contributor

Veteran golf writer Tim McDonald keeps one eye on the PGA Tour and another watching golf vacation hotspots and letting travelers in on the best place to vacation.


 
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