The Spanish Kingdom attracts not only vacationers. Comfortable climatic conditions, a developed economy and a rich cultural heritage make the country appealing for those who are planning to relocate there for permanent residence or make investments. Real estate in Spain is promising and has a high rental potential. Let's consider what advantages it gives to the owner and what you should pay attention to when choosing and buying it.
Content:
- Spanish real estate market: results of 2022, prospects for 2023
- Buying a property in Spain: advantages for the owner
- What pitfalls can be encountered when buying real estate in Spain?
- Conclusions
Spanish real estate market: results of 2022, prospects for 2023
It would not be entirely correct to talk about the prospects for foreign property owners in isolation from the market situation. The level of sales, the profitability coefficient for rental housing, prices, are those factors that push you to buy or force you to think. In 2022 alone, apartments in Spain rose in price by 8.1%. These are the highest figures since the beginning of 2008, when the market faced the «bubble» effect. Analysts predict that the number of transactions may decrease due to the changes in the monetary policy of the European Central Bank. However, this effect will be caused by tightening in the field of mortgage lending, and not with a lack of demand.
Experts are talking about a possible cooling of the market, but the «bubble» is still far away. In addition, the probability that housing prices will fall is extremely small. There is an opinion that in 2023 the dynamics of the residential real estate market will be negative. The link is traced between the increase in apartment prices, which will be lower than the inflation rate in the economy. At the same time, foreigners continue to actively invest in local housing stock, preferring more expensive and respectable objects.
Buying a property in Spain: advantages for the owner
Among the undoubted advantages are the following:
- Obtaining a residence permit. When buying a house worth more than 250,000 euros, foreigners can apply for a residence permit. The procedure is quite simple and is not accompanied by red tape.
- The ability to save funds from inflation. Real estate remains the most reliable investment, protected from the risks that are inevitable in the field of bank deposits and securities. Given the capitalization of the value of houses in Spain, real estate investments can bring additional profit.
- Income generation. Spain remains one of the most popular holiday destinations, while not all tourists prefer to use package tours. Also, many foreign students come to the country. This makes housing in demand when renting out and allows you to get a stable passive income. The annual rate of return on housing in 2022 ranged from 5 to 7.5%. The exact figures depend on the quality of the object and the location region.
What is the purchase budget you can count on?
The local market is diverse, which allows you to choose housing for any budget level. The cost directly depends on the type of property, location, area, number of bedrooms, degree of comfort and well-being of the residential complex in Spain. The cost of apartments starts from €200,000. Houses, townhouses and villas are offered at a price of €500,000. Traditionally, prices for housing stock in Madrid and large cities that are the centers of the provinces remain high. In suburban areas, you can find more affordable offers.
What to consider when choosing?
If housing is purchased not for moving, but for renting, it is worth considering that studio apartments and one- and two-bedroom apartments are in consistently high demand. Housing in areas with developed infrastructure, located in close proximity to public transport stops, remains the most cost-effective. The availability of a parking space is also welcome.
What pitfalls can be encountered when buying real estate in Spain?
Independent purchase of real estate abroad is always a risk associated with ignorance of local legislation. Therefore, it is preferable to use the services of qualified real estate agencies. Brokers know the market situation inside out and know the typical problems that may arise when buying a house in Spain. One of the main ones is misconceptions about an attractive price. As a rule, if housing is sold too cheaply, then something is wrong with it. Perhaps there are encumbrances, a ban on renting out or other nuances that are difficult to check yourself without knowing the subtleties of local legislation.
Conclusions:
- Investments in the Spanish housing stock allow you to save money and open up the possibility of moving.
- Housing in the country can be rented out, while it is not necessary to live in Spain, many local real estate agencies are ready to take over the services of finding tenants for a commission fee.
- You can get acquainted with the pricing policy of the region yourself, but it is advisable to make a decision about buying a specific property with the help of specialists.