Property abroad: The undiscovered Algarve

Away from the high-rise blocks and stratospheric prices of the tourist trail there are quieter, cheaper areas with historic towns, rustic markets and golden beaches, says Laura Latham

Overseas property markets may be in the doldrums but the appetite for Portugal keeps growing. Though sales on the ever-popular Algarve have levelled off recently, there hasn't been anything like the problems and price drops witnessed elsewhere.

This is because the Portuguese government has refused to allow the oversupply of cheap properties that have proliferated in neighbouring Spain, and because the country has consistently targeted high-end tourism. Much of the Algarve is given over to famous golf resorts, such as Quinta do Lago and Vale do Lobo, offering luxury homes that don't give much change out of £1m.

However, head east from Faro airport, towards the beautiful town of Tavira, and you'll find pretty villages, glorious beaches and rural areas where property is still affordable. "Most buyers avoid the eastern Algarve, which is a mystery to me," says Connie Vitto of Quadrant Overseas Property, "it's closer to Faro than the west coast, has quieter beaches and prices have always lagged behind other areas."

Vitto claims property around Tavira offers good value, with one-bedroom apartments from under £90,000, large two-beds from around £100,000, and new villas from £220,000 to £450,000.

She says land is also more affordable, and currently has plots from as little as £30,000 to around £150,000. "If a plot has a ruin on it you can get planning permission to build a new house," she explains, "though allow at least £100,000 for build costs".

Despite the eastern Algarve being relatively undeveloped, Vitto thinks new luxury developments will put it on the map. "Monte Rei, for example, is the best golf resort in the area, the equivalent of Quinta do Lago, but prices are much lower."

Boasting a Jack Nicklaus-designed golf course that's widely acclaimed as one of the best in Europe, Monte Rei is aiming for buyers wanting high-end homes at prices not seen on the Algarve in several years. The resort offers a mix of bespoke houses, three to four-bedroom villas and two-bed apartments, many with views of the golf course and sea. Despite being cheaper than competing resorts further west, costs are still high. The entry price on a two-bed apartment is £690,000, while three-bedroom properties cost from £865,000. Plots for bespoke property start at around £1.3m with a villa measuring 700 square metres costing around £1.7m to build.

Despite this, Mario Condeco, resort sales manager, reports homes are still selling. "The eastern Algarve still has much potential and cash-rich buyers who already own or have sold up in the western Algarve are gravitating here, looking for locations that are still attractive and less developed," he says.

Given the region's beauty, authenticity and affordability, the rest of us will surely follow.

Quadrant Overseas Property: www.quadrant-property.com; 01276 507513; Monte Rei: www.monte-rei.com; +351 281 952 521

Eastern Algarve: A buyer’s guide

* Property prices on the Algarve dropped 4.4 per cent in 2008 and are expected to dip even further this year.

* The Portuguese government has restricted building to protect the coastline and rural areas, it also has a policy of promoting renovation over new construction.

* New motorway connections have reduced travel time from Faro to Tavira to around 35 minutes.

* The eastern Algarve is well situated for trips into Spain, Tavira is 20km from the border.

* Agents are reporting the first signs of repossessions on, so it's worth keeping an eye out for good deals.