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Portugal’s Algarve Versus Spain’s Costa Del Sol—Finding The Best Value

Yes, I’d Say This Is Still The #1 Place In The World To Retire Overseas

Kathleen Peddicord by Kathleen Peddicord
Aug 04, 2020
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Costa del sol Spain

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We have named Portugal’s Algarve region as the world’s best place to live or retire overseas for four years running.

Portugal… and, specifically, its Algarve coast… checks every box on the would-be retiree’s list. The weather is the best in Europe. The health care is excellent and can be free if you establish legal residency.

Establishing legal residency is straightforward and possible, if you intend to live in the country, by showing as little as 1,400 euros of income per month.

The Algarve coast boasts many of Europe’s best beaches and golf courses. The food is fresh and local, with seafood a specialty. Thanks to a longstanding connection with the British, lots of English is spoken in this part of this country, which is generally safe, the local residents welcoming of foreigners.

The coastline is dramatically beautiful, the inland landscapes charming, and this is one of the most historic points in the world, the spot from which Henry the Navigator launched the Age of Discovery.

What more could you want?

We have trouble finding an answer to that question, which is why we continue to rank the Algarve as the world’s number-one place to live or retire overseas.

Of course, though, it’s not the only sunny, sandy option in Europe.

Another—much better-known—choice is Spain’s Costa del Sol, home to one of the world’s biggest communities of expat retirees.

How do these two regions compare? Let’s take a look…

The Costa Del Sol

The Costa del Sol is the extremely popular southern coastal area of Spain’s Andalucía region. It’s bordered by the busy towns of Nerja and Marbella, with Málaga as its centerpiece and an easy, four-hour drive away from Portugal’s Algarve.

The scenery on the Costa del Sol is stunning, with mountains rising dramatically out of the sea creating sheer drops to the sea far below. The coastal motorway through the region offers a drive without equal.

The trouble with this coast is that it became too popular too fast and, from the start, tourists, expats and property developers were allowed to flood into the region unchecked. Builders erected hundreds of thousands of poorly planned and sometimes illegal properties. The seizure (without compensation) over the past several years of many of these illegally titled properties has been big news in Europe’s vacation market.

One could argue (and I would agree) that the rapid commercialization of this area has had big and negative effects. The last word I’d use to describe much of Spain’s Costa del Sol would be “charming.”

The Algarve

Compared to Costa del Sol, Portugal’s southern coastal region—known as the Algarve—has changed little over the last two decades. The Portuguese people are polite, laid back, and in no particular hurry to fill the Algarve with apartment towers (though, as in every part of the world where man has made his mark, some poorly planned and overbuilt areas exist).

I would describe this coast as among the most charming I’ve known anywhere.

The culture that populates these rugged hills and coastal plains remains centered around village life. Each village with a mother church and communal well, or fonte. Modern conveniences are available in the larger towns, but, happily, this coast’s more than 100 kilometers of sandy beaches and 39 golf courses have managed to avoid many of the trappings of the modern world.

Unlike some development in Costa del Sol, property construction in the Algarve is carefully controlled by a system of planning and permissions. Portugal has worked hard to avoid the problems experienced in Spain by imposing increasingly stringent planning systems. One consequence of this—both a positive and a negative, depending on your point of view—is an under-supply of new-built properties.

In addition—and speaking very generally—property prices are lower in the Algarve than in the Costa del Sol. Values have risen, in some cases dramatically, over the past six years but now are softening and remain a bargain compared with pricing on Spain’s costas.

Kathleen Peddicord

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Kathleen Peddicord

Kathleen Peddicord

Kathleen Peddicord has covered the live, retire, and do business overseas beat for more than 30 years and is considered the world's foremost authority on these subjects. She has traveled to more than 75 countries, invested in real estate in 21, established businesses in 7, renovated historic properties in 6, and educated her children in 4.

Kathleen has moved children, staff, enterprises, household goods, and pets across three continents, from the East Coast of the United States to Waterford, Ireland... then to Paris, France... next to Panama City, where she has based her Live and Invest Overseas business. Most recently, Kathleen and her husband Lief Simon are dividing their time between Panama and Paris.

Kathleen was a partner with Agora Publishing’s International Living group for 23 years. In that capacity, she opened her first office overseas, in Waterford, Ireland, where she managed a staff of up to 30 employees for more than 10 years. Kathleen also opened, staffed, and operated International Living publishing and real estate marketing offices in Panama City, Panama; Granada, Nicaragua; Roatan, Honduras; San Miguel de Allende, Mexico; Quito, Ecuador; and Paris, France.

Kathleen moved on from her role with Agora in 2007 and launched her Live and Invest Overseas group in 2008. In the years since, she has built Live and Invest Overseas into a successful, recognized, and respected multi-million-dollar business that employs a staff of 35 in Panama City and dozens of writers and other resources around the world.

Kathleen has been quoted by The New York Times, Money magazine, MSNBC, Yahoo Finance, the AARP, and beyond. She has appeared often on radio and television (including Bloomberg and CNBC) and speaks regularly on topics to do with living, retiring, investing, and doing business around the world.

In addition to her own daily e-letter, the Overseas Opportunity Letter, with a circulation of more than 300,000 readers, Kathleen writes regularly for U.S. News & World Report and Forbes.

Her newest book, "How to Retire Overseas: Everything You Need to Know to Live Well (for Less) Abroad," published by Penguin Random House, is the culmination of decades of personal experience living and investing around the world.

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