How to ensure you don’t lose money in the Spanish real estate market during the pandemic-induced crisis? Is Spanish real estate currently a good tool to save and increase money?
Many investors are asking similar questions since the real estate market in Spain has experienced the serious impact of the pandemic. The restrictions imposed led to the closure of borders between countries and, as a result, the impossibility of the physical presence of potential buyers of foreign real estate. However, while these circumstances prevented transactions from being concluded remotely, they also accelerated the development of modern technologies in the Spanish housing market.
So, let's analyze the current situation in the Spanish real estate market.
Content:
- The real estate market in Spain today
- What will happen to real estate prices after the epidemic?
- How to get citizenship online?
- Is it possible to conduct a remote real estate purchase transaction in Spain?
- What opportunities have appeared for foreign buyers in the Spanish real estate market?
- We will help you buy real estate in Spain
The real estate market in Spain today
Spaniards still save most of their money to buy real estate. This is to purchase a first property as well as a second one for residence or renting out.
According to the Central Bank of Spain, in the second half of 2021, the growth of housing prices and rental yields combined reached 7% relative to the same period of the previous year.
In recent months, inflation has risen sharply in Spain. According to preliminary data, it amounted to 5.6% in November 2021.
Analysts explain that the rise in prices of Spanish real estate is associated with the ratio of supply and demand. Supply has increased and demand has declined after a reduction in the pace of new construction due to COVID-19 and rising prices for raw materials.
Experts also note that the residential sector is currently one of the most attractive sites for investment due to uncertainty about the persistence of inflation, low rates and the lack of more profitable alternatives at the same level of risk.
What will happen to real estate prices after the epidemic?
The medium-term forecast for real estate prices in Spain shows stability or a slight increase in the number of home purchase and sale transactions. At the same time, the demand for rent will decrease. One of the reasons is that customers today are more likely to choose to buy than rent. The latter is caused by several factors:
- Reduction of mortgage interest rates.
- Available income, which has recovered to pre-pandemic levels.
- The attractiveness of housing as an investment.
- The impact of a new housing law.
In Spain, the purchase and sales prices of housing increased by 10% in 2021 compared to the previous year.
Experts assure that a moderate number of transactions will lead to a natural stabilization of prices for Spanish real estate and the increase in secondary market prices in 2022 will not exceed 2%. However, new housing will be subject to price fluctuations due to a shortage of materials or difficulties in finding a suitable workforce.
How to get citizenship online?
Since July 2017, you can remotely apply for citizenship in Spain. The procedure is carried out through the Sara (Electronic Registration) network owned by the Ministry of Justice. This department is responsible for processing and reviewing cases when applying for Spanish citizenship.
However, the process of obtaining citizenship has not become easier despite documents and responses to requests coming in an electronic form to speed up the process.
Requirements when applying for citizenship in Spain
- Stay in Spain during the legal period required to apply. The specific term depends on the status of the person who corresponds to the data in the following table:
The required time of stay in Spain before applying for citizenship Status 1 year Marriage to a Spanish citizen; children or grandchildren of Spaniards born outside Spain 2 years From American countries, Andorra, the Philippines, Equatorial Guinea and Portugal 5 years Refugees 10 years Others - Valid tax identification number in Spain ‒ NIE.
- No criminal record.
- Staying in Spain for more than 3 months, taking into account the last 12 months of residence (subject to paragraph 1).
- Passing the CAE and DELE exams (the latter only applies if the applicant is not from a country where Spanish is spoken).
Advantages of the procedure of obtaining citizenship in electronic form
- Flexibility and time-saving.
- Security.
Virtual communication provides significant progress in the interaction between institutions, which facilitates the simultaneous processing of more cases of Spanish citizenship in the interests of all foreigners.
Tips for providing files in electronic form
- Familiarization with the rules of the GCSE exam.
- The certificate of no criminal record in the country of residence must be translated into Spanish and notarized.
- Their validity period mustn't expire from the date of issuance of documents (usually 3 months).
- Copies of all passport pages including blank ones.
- Payment of administrative fees (102 euro).
- If any changes have occurred during the period of consideration of the application, it is necessary to inform the lawyer or the Ministry of Justice about it.
- Royal Decree 1049/2020 of December 1 approved new provisions concerning the application for Spanish citizenship in 2021. In particular, it provides the possibility of taking the CCSE and DELE exams online.
Is it possible to conduct a remote real estate purchase transaction in Spain?
Most buying and selling of Spanish real estate can be done remotely.
If all the rules and security measures are followed, the process of buying and selling real estate via the Internet is quick and easy.
How to organize a housing search?
It is easy to search for a house or apartment in Spain on the Internet.
When choosing a property, it is necessary to know its exact location in order to explore the infrastructure (check the availability of schools, shops, public transport stops, as well as mobile communications in the region).
How do I find out the value of the property?
When buying a property in Spain in an unfamiliar area, it is recommended to study housing prices in the area of interest.
A real estate appraiser can be of great help in obtaining more accurate information about the value.
Is a virtual tour enough?
Before buying an apartment or a house in Spain, it is strongly recommended to visit the potential property. Currently, virtual tours are gaining popularity. This viewing mode can help you pre-select the accommodation you are interested in but it is unlikely to replace a personal visit.
On the other hand, if the real estate is under construction, then the purchase can be made completely remotely.
What opportunities have appeared for foreign buyers in the Spanish real estate market?
Many buyers, both Spanish and foreign, have the opportunity to use various technologies in the real estate market. Although certain technological tools previously existed in the real estate industry, the pandemic has accelerated their use.
Technologies that can be used by foreign buyers in the Spanish real estate market:
- Investment and mortgage platforms.
- Virtual and augmented reality, with designs of premises in a digital format.
- Virtual tours ‒ this is a series of images with a 360-degree view that simulates a real visit to a property.
We will help you buy real estate in Spain
If you are interested in investing in Spanish housing, Spain-Real.Estate provides services for the selection of real estate according to the wishes and requests of future owners.