Caldas de Monchique is a bit like the set of The Truman Show. It’s a slightly sanitised, faintly fantastical hamlet with a therapeutic calm, its pastel-painted buildings nestled above a delightful valley full of birdsong and eucalyptus, acacia and pine trees. Located 6km south of Monchique, it's 500m below the main road.
It has been a popular spa for over two millennia – the Romans loved its 32°C, slightly sulphurous waters, which are said to be good for respiratory and digestive ailments and rheumatism. Dom João II came here for years in an unsuccessful attempt to cure his dropsy.
Floods in 1997 led to the closure of the spa hospital, after which it was redeveloped into a spa resort and its picturesque buildings repainted pale pink, green and yellow.