Overlooking the Golfe green at the five star Portuguese resort of Quinta do Lago are four houses – all, at first glance, the epitome of the “escape to the sun” idyll.
Three of them, recently built by the same developer, are large, ultra-modern glass homes that wouldn’t look out of place on BBC’s Grand Designs, with one of them on sale for €11m. Directly beside them sits a mid-1970s villa with a Moorish white-domed roof; the kind of pretty southern Mediterranean villa that typified dream holiday homes a couple of decades ago.
But, like many others in the resort, it is soon likely to be demolished. This traditional house would be worth about €2.5m, which is purely its residual plot value (the same house a few hundred metres off the resort would cost a third of that, such is the Quinta land-value). The house itself – though it has the same location, views and plot size as the modern villas next door – is worthless.
“Any house on Quinta that is more than about 25-years-old has zero value,” says Jamie Robinson, Quinta’s director of sales. “People want modern, hi-tech properties of the sort they have at home, so they will buy a property like this purely for the plot, demolish it and build something bigger. Some buyers now think ‘nice plot, wrong house’ and demolish properties that are only 12-years-old.”
There’s a similar Moorish-style 420sqm villa on a 2,000msq plot on sale for €2.3m. If you bulldoze it and build a new 750sqm villa for €1.6m, you’ll end up with a property worth €6m, an appealing €2m profit.
“About half of the people knocking down and rebuilding are developers. The rest are owners seeking to build themselves a bespoke modern home,” he said.
Homeowners are also sitting on a limited supply of properties. Some of the last remaining plots on Quinta’s San Lorenzo North have just gone on sale from €2.3m. They’re being trickle-fed onto the market, a few each year, all with golf views, some overlooking a lake, and all discreetly hidden among untouched acres of parasol pines.
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A growing trend is to buy two plots, which means you can build a minimalist mansion of up to 1,000sqm – and that’s just above ground. Basements don’t count as part of the permitted build density so owners are digging down and adding another few hundred sqm for the home cinema, gym, spa and nanny’s quarters – as seen in one five-bed, 580sqm villa for sale for €7.5m, designed with huge lightwells so that the basement rooms don’t feel subterranean.
The golf courses are the big draw for the resort – and Quinta do Lago has three of them, including the redesigned North Course which has benefited from a £7.7m investment.
It's all part of a €29m programme, with a further €21m set to be spent on the resort in the next few years.
It's a huge complex, with more than 500 villas set in 800 acres. The Four Seasons Golf and Country Club and the Fairways Club started the ball rolling in the 1980s and now the portfolio of villas, rooms and hotels is ever-expanding.
The celebrity contingent is impressive – former Formula One world champion Ayrton Senna was one of the first to fall for its charms. Former England football captain Steven Gerrard has a house here (complete with giant outdoor screen), and Chelsea's John Terry is also a regular visitor.
Property prices fell alarmingly across the Algarve, but Quinta and nearby Vale do Lobo are stable. But with such competition nearby – there are more than 40 golf courses on the Algarve competing for your attention – even Quinta can't stand still.