Cost of Living in the Algarve: The Breakdown

Euros-in-a-wallet

The Algarve is a great place to live. More than 300 days of sunshine, beautiful beaches, and a laid-back culture making it a popular place to move to.

The cost of living in the Algarve is also very affordable, particularly when it comes to food and drink. It’s possible for a couple to live in the Algarve on €800 – €1,200 per month, although outgoings obviously vary from person to person: some live on less but some live on a lot more.

Rental costs in The Algarve

The Algarve can be a very affordable place to rent. Monthly rental prices start from around €300 for a basic 1 or 2-bedroom apartment, and there are many apartments in the €400-700 range. You can get a better idea of rental prices by browsing the rental section of the major classifieds websites in Portugal (see: renting long term in the Algarve).

Rental prices are often cheaper inland, away from the touristic coastal towns, but this isn’t necessarily always the case. You can often find affordable rentals along the coast.

If possible, move to the Algarve during the winter or off-season months. Renting during the winter and off-season is considerably easier as there’s little tourist trade, and property owners aren’t thinking about renting their properties over the summer.

Renting during the summer is possible, but it’s easier if you try to get the long-term rates if you start renting a few months before the peak tourist season begins.

Renting for just a few months

Airbnb is a good option for short term renters who only plan to be in the Algarve for a few months. You’ll pay slightly more than you would if you rented privately or through an estate agent, but you won’t be in a six-month contract and your bills will be included.

Some estate agents or landlords will also rent on a shorter term basis, particularly during the winter months as they will have summer rentals that would otherwise be left empty.

Note: You’ll see words like T0, T1, T2, etc on Portuguese property websites. T0 is a studio, T1 is a 1-bedroom property, T2 is a 2-bedroom property etc.

Where to live in the Algarve

Where should you live in the Algarve? It depends on what you want.

If you’re looking to live in a city, Portimão and Faro are the two largest cities on the Algarve. Faro is the prettier of the two and has more to offer tourists; Portimão is more of a functional city. Neither are particularly big: both have a population of around 50-55,000.

Those interested in surfing (or learning to surf) should consider Lagos, Sagres, or anywhere close to the West Coast as this is where the surfing takes place. Sagres is small and primarily made up of surfers, whereas Lagos attracts a variety of different people.

Beaches are plentiful across the Algarve. If you have a car, you don’t need to limit yourself to living in one of the coastal towns like Albufeira or Carvoeiro. Living inland will often be cheaper and is typically less touristy. If you don’t plan to bring a car with you, you’ll probably want to live closer to the coast.

Walkers and hippies (for want of a better word) both tend to like Monchique (the Algarve’s mountainous region), Lagos, and the West Coast.

Eating out in The Algarve

Eating out in Portugal is also very affordable, especially when compared to most other European countries. At a traditional Portuguese restaurant in the Algarve, a main meal usually costs between €8-13.

It’s possible to eat for less than that, especially if you go to a non-touristy restaurant. Many charge less than €10 for a menu completo (starter, main, dessert, and drink). Piri-piri chicken and other affordable dishes are often prices at around €5-7.

Most Portuguese cafes also serve food, and they’re a good place to try traditional Portuguese mains and snacks. A bifana (pork sandwich) usually costs around €1.50-2.50 and a burger or daily special will cost around €5.

For a small beer (imperial) or a glass of wine, expect to pay around €1.50-2.50. An espresso (bica) usually costs between 0.50-0.80 and the irresistible pastel de nata, another 0.80-1.20 on average.

Of course, those are for the more traditional but less luxurious restaurants. The Algarve has restaurants to suit every taste and budget and, as well as the restaurants above, it has plenty of more expensive international, fine dining, and multi-Michelin star restaurants.

Grocery shopping

The cost of food and drink in the Algarve is extremely affordable. Expect to pay around €20-40 for a couple’s weekly shop (less if you’re vegetarian or vegan). The Algarve’s many markets are great value for money, and often have better quality produce than the supermarkets as well.

Brits will find a lot of those hard-to-get products such as mince pies, gravy granules, and curry spices at Iceland in Algarve shopping. Although this shop is called Iceland, it actually stocks both Iceland and Waitrose products. It’s possible to do a weekly shop here, although it would run slightly more expensive than in a Portuguese supermarket like Pingo Doce, Jumbo, or Continente. Lidl and Aldi are both also handy for finding those hard-to-get German products. If you’re really stuck, Apolonia stock a lot of higher end products although they’re much more expensive than the other Portuguese supermarkets.

Alcohol costs

Alcohol is very affordable in Portugal. It’s often possible to find a good everyday bottle of wine for €2-3, although the average is probably closer to €4-5. Most of the supermarkets regularly discount the bottles and so it’s often just a case of stocking up whenever they do.

Transportation costs in The Algarve

Unlike Lisbon and Porto, you really do need a car in the Algarve. You can get around by train, and there is a bus network, but it will definitely limit your ability to see a lot of places easily.

You can either rent a car on a long-term basis, buy one, or bring your car with you to the Algarve (normally for up to six months). UK car owners, see our post on car insurance companies that offer long term car insurance for driving in Europe.

Alternatively, if you only need a car for occasional use, you could rent a car as and when you need it. Use Kayak.com or RentalCars.com to compare prices from all provides. As a guide, prices usually start at around €10 per day in the winter and €25-€30 in the summer.

Rail travel is extremely affordable in Portugal, especially long-distance. If you buy your train tickets more than a week in advance, you’ll get a discount of around 40-50%.

As an example, here are a few prices for single tickets.

  • Faro to Lisbon: around €10-12
  • Faro to Lagos: around €7.50 – €10.
  • Faro to Albufeira: around €5-€8.

Buses are another option, with a day pass costing around €3-4 on average.

Cycling is another alternative that’s slowly gaining popularity. Many bike hire companies will offer a long-term monthly rate. Alternatively, you can pick up a bike for a few hundred Euros from Decathlon (outlets in Faro and Portimão).

Electricity & Utilities costs

Utilities for a small apartment typically come to €100-150 per month, which covers things like electricity, gas, bins, and water. Of course, this varies depending on your usage. Summers in the Algarve are hot, for example, and you’re likely to have the AC on a lot.

Winters are generally mild but it’s worth noting that Portuguese houses can be cold in the winter, as they’re designed to get rid of heat. This isn’t true of all properties: if your house catches the sun in the winter it may stay reasonably warm.

Most AC units will have a heating function, but the heat doesn’t tend to stick around. Fireplaces tend to heat these properties best, and you’ll find that many of the houses (as opposed to apartments) have fireplaces.

Other costs to consider

Health insurance

Portugal has a public health service, which you can sign up for as a resident. Some people prefer to sign up for a health insurance plan, which will obviously increase your monthly costs.

If you’re visiting the Algarve on a short term basis, you will need some kind of emergency cover. European citizens are covered for a number of emergency treatments under the EHIC card scheme, but this doesn’t cover everything and travel insurance is always recommended.

Language classes

Group language classes usually cost around €60-70 per month while one-to-one classes cost around €15 per hour on average. If you can’t find any classes in your area, consider booking lessons over Skype through Italki.

Fun

The Algarve is great for two things: beach and walking. Both of these things are free, which keeps the costs down even further.

Other fun things to do on the Algarve include learning to surf, fishing, and going on a vineyard tour.

For example prices:

  • We paid €40 per person for a two hour surf lesson in Lagos. If you already know how to surf, it’s possible to hire the board and wet suit separately.
  • A tour of Cliff Richard’s vineyard at Quinta do Miradouro costs €7.50.
  • A boat trip around the Algarve caves costs around €30 – €35.

If you like going out, this is very affordable (a beer costs €1 on average) although it’s more of a summer month activity. Excluding New Year’s Eve, the Algarve is very quiet during the winter months.

Shopping (clothes etc.)

The Algarve has several shopping centres like Algarve Mar near Faro, Forum Algarve in Faro, Aqua in Portimão, and Algarve Shopping near Guia. These shopping centres usually have international favourites like Primark, Pull & Bear, Berksha, Accessorize, C&A, as well as few higher end brands like Massimo Dutti.

Bank accounts & currency transfers

If you plan to stay in Portugal long-term, you’ll probably need a Portuguese bank account. Most Portuguese banks charge a monthly fee of between €5-€10, so you will need to factor that into your costs.

If your earnings or savings are in a non-Euro currency, it makes sense to pay attention to the currency fluctuations and to move your money at the most opportune moments. Sites like Transferwise are also worth using instead of traditional banks, as these do not charge the same fees that banks do.

Co-working spaces

The Algarve isn’t quite the digital nomad hotspot that Lisbon or even Porto has become, but that doesn’t mean it’s a good place for remote workers, digital nomads, and freelancers. As there are only a few digital nomads and not much of a startup scene, this will be a quieter experience than staying in somewhere like Lisbon.

The Algarve VS other parts of Portugal

Although the Algarve is more expensive than other rural parts of Portugal, it’s more affordable than big cities like Lisbon and Porto.

The (Costa de Prata) Silver Coast north of Lisbon is often touted as an alternative and more affordable version of the Algarve, although it doesn’t have the same expat scene that the Algarve has. For some people, that could be a pro rather than a con. There’s also the Costa Azul (Blue Coast), near Setúbal and Sines, which is South of Lisbon.

It all depends on what you’re looking for. Portugal’s cost of living is one of the lowest in Europe, but most people moving to Portugal want to either be near a city or near the coast. Those two things raise the cost of living but, for many people, are an essential factor in getting the quality of life they want here.

Have you lived in the Algarve? Do you think it has a good cost of living? Let us know your thoughts and reviews by leaving a comment below. 

Spot a mistake? If you notice a mistake, or would like to suggest improvements to the article, please get in touch. This article was last updated in December 2018.

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37 COMMENTS

  1. We’re coming to the Algarve from the U.S. on January 8th to scout the area as a possible retirement home. Thanks for this very down-to-earth report on expenses.

  2. Hi James,

    Two friends (sisters) are going to Lisbon for a couple of days and then wish to rent a condo in Lagos for 5 days in June. I’ll be joining them. What’s the best way to go about finding a nice inexpensive condo or apartment to sleep three people? Also, is it practical to take a trip to Seville during our stay?

    Thanks,
    Lisa

    • Hey Lisa,

      Apologies for the delay in replying! Airbnb is usually your best bet, although booking.com can be helpful as well. Between the two of them, they dominate vacation apartments here.

      From Lagos to Seville is definitely doable. There’s a bus! Apart from hiring a car, or using a rideshare service like BlaBlaCar, this is the only way to get between the two places.

      It takes about 3 hours to get to Seville. I’ve done it as a daytrip from the Algarve before, but it’s probably better to do an overnight in Seville.

  3. Hi James,

    Thanks! Should this all transpire, would you be interested in being interviewed for ExpertFlyer.com onsite?

    Best,
    Lisa

  4. Hello James,
    This is all very helpful information. My husband and I are planning to make a trip to The Algarve within a year’s time. I’m working on getting all the paperwork done so that we can make The Algarve our permanent residence, if possible. We’re from USA so will be filling out forms required of us before and once we get to Portugal. Meanwhile, I’m studying about the history of Portugal and learning the language. I have two or three questions I’d like to ask you, but prefer doing it via email. If so, please contact me by email to let me know and I’ll get back to you with my questions.

    Thanks so much for doing this blog.

    Kristina

  5. Hello, we’re a small family of 3, and we’re thinking to move to porto o comibra, do you think that 1200 euros per month is enough to live there? thanks

    • Hi Carina,

      If your outgoings are just rent and food, then it should be doable. I would recommend taking a look at the rental prices on OLX.pt, to get an idea of how much rent costs in both places. I would imagine that Coimbra would be cheaper than Porto, but I’m not sure.

  6. Hi James
    I am an Australian looking at relocating to Portugal around November 2017. You article is terrific, especially the various links. Thanks very much.

  7. Hi James,
    thank you for your report, found it very useful. I am an Aussie who has been living in the midwest USA for a few years and ready to “move on”. The Algarve area holds great appeal to me but not sure why, think perhaps its because as teenager I imagined living in a mediterranean environment, one with sandy beaches and homes carved into a hillside complete with geraniums in window boxes. Anyways my question is more about lifestyle. I have enjoyed immersing myself in other countries/cultures but at times have felt a little isolated as I am a single female in her 50’s. Is it easy to find places the expat community there frequent and socialise? I would really enjoy being part of such a community whilst still enjoying the local culture.

    • Hi Sharon,

      There is a large expat community here, and yes there are plenty of regular meetups like walking groups, book clubs, Irish groups, rotary clubs, etc. I’ll try and do a post with a list of all the different ways to meet people, but I think the real challenge is finding the group that’s right for you. That can definitely take some time!

  8. So good to read all of this. My husband and I will be retiring to Lagos in 3 years. We visited last June and now are so homesick for Lagos already! I’m looking forward to corresponding with others in our same situation. Can’t wait to join book clubs, tennis clubs, language classes, wine tastings, etc. there. I’m a teacher here in the US and hope to be able to volunteer at schools there. Can’t wait to hear more.

    • I would suggest you consider taking a postal subscription to the Algarve English language paper ‘AlgarveResident’.
      This will keep you plentifully informed.
      Also ads which might be of interest for renting or buying.
      http://algarveresident.com/contact-us/

      PS: I have no personal / financial interest in the paper ~am just making the suggestion.

  9. hi we are looking to move to portugal in the next few months but finding it hard to find acomadation on a budget we need 5 bedrooms and dont want to spend a fortune any suggestions

  10. Hi James,

    Your blog is incredibly useful as I’m hankering to move to Portugal hopefully in the next year. I want to rent for at least a year before deciding whether to buy; what is your view on the effect Brexit will have on us Brits wanting to live in Portugal and how easy (or difficult) is it to find very long term lets in the Algarve?
    Thanks for taking the time to avail us of your in depth knowledge and for keeping your blog simple but informative.

  11. James, I am single, 61-year-old guy from California and wishing to move to Portugal. I very much would like your very sensible opinion. I’m not sure the Algarve region is right for me. I do not play golf nor am i interested. I generally like the more textured side of Portugal i.e Porto, Coimbra, outer Lisbon though I confess that I do not wish to potentially be isolated from a social – even dating life due to the fact that while I will put much effort into learning the language, the reality is I likely will not ever become fluent as I have lived in other countries (Paris one year, Tonga in the south pacific 3 years) and despite tutoring, really trying hard, I was never fluent but sort of functional. So, is there an area of the Algarve that has the texture of Porto, trees, an generous English speaking community but not overwhelmingly, and very near to the water? I have mild asthma and so to many hills are not my friend. Thank you

  12. We want to move to the Algarve. We’ve been there many times. We are from the US. The problem is that this article is called Living in the Algarve Long Term and you keep talking about seasonal rentals etc. What is the cost to LIVE there 365 days a year?

  13. Hi there James;
    My wife an I will be spending 5 weeks ( March) in the Lagos area. We have a condo with a heated pool and we both love the beach so we’re good with that if we can swim in the ocean. We also like exploring and think a car might be handy, particularly if we took 2-3 day trips out of Lagos and up the coast or towards Spain. Would a little car be expensive for short trips?

  14. Hi, This is a very useful site, could I ask please, it is now February 2018, how up to date are your costings/ rental charge estimates , etc?
    Thanks.

  15. James, I’m a U.S. citizen and am considering retiring to Portugal when I’m 65. I’m 59 now, and I think I’ll have about $1,700 a month of social security income when I retire. I’ll have about $250,000 U.S. dollars to buy an apartment. I don’t have a lot of money—do you think I’d be able to live comfortably there? Thank you!

  16. I am not James. ( He seems to have gone quiet in 2018 ~hope that will change soon as the information on portugalist.com is top notch. )

    However I can make a couple of suggestions from personal knowledge:
    1]
    Do NOT delay in starting to learn Portuguese. If you think it will be similar to Spanish in difficulty ( ie not very ) you are WRONG WRONG WRONG.
    It is much more difficult to speak and even more difficult to understand ( beginning and final vowels tend to just disappear ~ eg ‘obrigado’ is often pronounced just ‘brigad’ ~takes some getting used to. ) You need to study the grammar as well as the pronunciation and the more time you can devote to this before setting off for Portugal the better.
    There are some excellent recommendations for learning Portuguese on this very website.
    2]
    Presumably you already know that Porto and Lisbon are both very hilly ~is that really an obstacle for you because if so then it sort of rules them out I would have thought ?
    Or maybe you can get by by just taking things slowly and using your inhaler ? In Lisbon there is the wonderful 28 Tram ~ though it does not get you everywhere.

    If those ( very beautiful ) cities are not in fact ruled out then my suggestion would be ~why not spend a month in each of Porto and Lisbon, and then another month somewhere in the Algarve ?
    No need to make a ‘final’ decision on your resting place until you have had the experience of all of them.
    As to where in the Algarve on the basis of your interest in culture and such I would recommend Tavira ~either the town itself ( very beautiful ) or Cabanas de Tavira which is a few kms to the East and has direct ( ie walking ) access to the sea ……… whereas from Tavira you have to get a short ferry ride.
    3]
    One good thing about Portugal is that the distances are not huge – so, for example, if you were to settle in Tavira ( or elsewhere in the Algarve ) eventually, it is a simple matter to get the train to Lisbon now and again ( just one change at Faro ) for concerts / exhibitions etc..
    If the hills do not rule it out I would suggest you start with the Summer School for Foreigners run by the University of Porto

    https://sigarra.up.pt/flup/pt/cur_geral.cur_view?pv_curso_id=5181

    Subsequent years you could do the one run by Lisbon University and also that given by the University of the Algarve.
    If you are ( or will be ) free from earning and other commitments then consider doing the Curso Anual at Porto or Lisbon Universities ( unsure if the Algarve University does one ).
    The fees are lowish, and I imagine that being signed up to a full year’s course would get you an appropriate length Visa.
    Because journey times are relatively short you would have plenty of opportunity to travel and explore and work out which area of Portugal suited you best for long term residence.
    You might have access to University Halls of Residence ~which could be fun, as well as cheap.
    4]
    As to social life : Porto, Lisbon and the Algarve all have English speaking expats , both working and retired.
    Though of course you will want to make friends amongst the locals too ~ although you can get by with English everywhere, as all educated Portuguese speak excellent English ~ you would benefit from being able to at least make efforts in the language ~and for that you need to study and persist ! ( See [1] above 🙂 )
    5]
    Check out
    http://portugalresident.com/
    regularly ~would recommend taking out a trial subscription to the printed paper.
    There is also AlgarveResident.

    • Hi Rhys thanks for all your very useful information and yes James seems to have left. Hoping he is alright. I just visited Portugal for the first time a week ago and absolutely loved it. Lisbon, Porto and Caiscais. Would love to see the Algarve next year as researching places to semi retire. I’m 58 single Irish female living in San Diego California also a painter so looking for an artist community to live in. Can u recommend an area in the Algarve for retiring artists? Will rent for a year and then purchase a home. Thanks again for your great advice. Dee

      • Hi Deidre,

        I’m still here 🙂

        I’m not sure about artist communities, so hopefully someone else can chime in. I know places like Monchique have large communities of artists, and the West Coast tends to attract quite a few as well, but I don’t know of any official communities.

        James

  17. Yes I agree with John. Rent alone will be at the very least €600. If you live in a small remote village some of your costs might be correct. This needs to be updated.

    • Mariana, Can I go with you? LOL
      Single no children and look just like Liam. Same age too.
      Just kidding about imposing, but there is a good chance I may see you there Jan 2019……..
      Take care good luck..

    • Hi Kim,

      350-450 is quite low for two bedrooms (called a T2 here), but there are some. Any of the sites mentioned in the article e.g. sapo.pt, olx.pt, etc. are where you’ll find these properties.

      James

  18. Hello James
    I would like to relocate to the Algarve from Melbourne Australia and wondered whether there is any Mediation work for people who only speak English? There is a lot of conflict today and Mediation is a growing area especially in businesses, in schools and in ordinary every day communications. Your thoughts would be welcomed.
    Lyn

    • Hi Lyn,

      I honestly don’t know, but I think it might be difficult to get work in that type of field if you don’t speak Portuguese. While a lot of people speak English on the Algarve, business etc is primarily conducted in Portuguese and it sounds like the kind of thing people would want to do in their native language. Just speculating, though, as I really have no idea.

  19. Howdy,

    I would like to know more about legal status to retire in Portugal. I am a US citizen. Are there ways to stay beyond the 90 days as a tourist? And I would like to travel to other European countries and keep Portugal as my home base. But if I can only do 90 days in an EU country, how can I make this work? Thank you.

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