It appears that the market is continuing to feel the positive impact of some key recent developments such as the return of the core British market, the appearance of new emerging markets which are driven by favorable and innovative legal and tax structures, as well as the increasing availability of mortgage financing.

The survey found an overall positive mood in the market with the activities of so-called ‘bargain hunters’ dropping considerably during the first four months of the year, while at the same time enquiries, offers and even transactions were all up.

The data was gathered from 10 leading real estate agents in the region and was complete in May, researching market confidence, performance and market trends.

It appears that the interest from the ‘end users’ is increasing constantly, these accounting for 80% of all enquiries. By far the most popular property types are still villas and apartments, with 77% of respondents reporting enquiry levels for these two types of properties being up.

The good news is that the market stabilization trend that started during 2012 seems to be continuing into 2013 as evidenced by the lack of change in the prices of apartments on the coastal strip and the prices for stand-alone detached villas decreasing by just 2%.

Despite the presence and penetration of the Internet in all facets of life, it only accounts for 27% of all leads, with walk-ins and word of mouth still accounting for half of the leads and 18% being generated by overseas agent contact.

While the growing sales volumes are being fuelled by the returning of the traditional British market, the Swedish make up 10% of the market with the Russians and Chinese making up for 15% between them, and this is a sign that the Government’s Golden Visa Scheme and the Non Habitual Regime are actually helping by stimulating demand.

A recent survey amongst local property agents has revealed that buying and selling of property during 2012 has shown some improvement when compared to the past couple of years. In fact, about seventy percent of the leading Algarve property agents who took part in the survey are of this opinion.

The 10-10-10 Survey – as it is called – contains ten key conclusion, and was a joint project between ILM Group and Property Lynx. The survey is carried out three times per year and its goal is to measure market confidence, performance and market trends – the next one for instance will be completed in May 2013 with its results becoming available in June.

The majority of participants reported the enquiries, offers and transactions and offered evidence of enquiries leading to complete purchases. For instance, 26 percent of enquiries for villas and luxury villas converted into 27% of sales, not a bad conversion percentage indeed.

Interestingly enough, the market is dominated by the top end and middle range, meaning that 27% of transactions were at more than one million euros – which is a 175 increase compared to 2011 – while transactions in the 100,000 to 500,000 euro bracket accounted for 51% of the market.

The survey also revealed that the overall market demand has been hindered by several motives such as pricing factors, lack of finance opportunities and unreliable banks, as well as general concerns in regards to the Euro’s stability.

Another major problem that the Algarve agents reported was the lack of support from the government and the regional and local authorities, as well as with the overall promotion of the region. They said that they cannot compete with other destinations when the focus of the region’s tourism industry stays on golf and the beach.

On the other hand, the survey does conclude that the regional agents, operator and developers are overall optimistic about 2013’s prospects, optimism that is propped up by the Portuguese government’s commitment to market the ‘Living in Portugal’ initiative.