It is easy to understand why Spain might be a popular choice for property investment. Stunning weather, fantastic cities, excellent infrastructure and a position at the heart of Europe combine to make Spain an incredibly desirable location. Of course, just because it has the features to make it popular doesn’t necessarily mean that it is a good investment.
To understand how Spain has risen to once again become one of the most popular real estate investment opportunities in the world, it takes looking at the wide range of factors that has affected the market in recent years.
If you are thinking of investing in Spanish property, now might be the perfect time. Here we take a look at why now might be ideal for you, and the issues that you need to consider when establishing whether you should invest or not.
Prices are rising fast
Growing demand for all types of property in Spain is causing prices to rise. For those interested in investing, this has shown just how buoyant the market is and has encouraged confidence.
One of the driving factors has been the popularity of new build properties. On the Costa del Sol, the area saw a 26.2% rise in property sales in 2021 compared with 2020. Higher demand has naturally pushed up prices, with the Registrar's Association reporting an increase in house prices of 3.9% in the year.
It’s not just the Costa del Sol that is experiencing rising prices. Major cities such as Madrid and Barcelona are also seeing tremendous year on year growth. As the worst of the Covid-19 may be behind us, there is some feeling that popular cities that had seen fairly flat or dipping sales over the past year, are now likely to increase again.
It’s still popular with expats
Undoubtedly a key growth area for Spanish property has been the influx of foreign buyers. Locked out during the challenges of the pandemic, expats have once again shown their interest in buying in Spain. Of course, this has always been a popular market with foreign buyers, but with increasing numbers of ‘digital nomads’ choosing Spain as their ideal place to work from home, it’s not surprising that this growth is occurring.
“We have seen the market really pick up this year,” says Adrian Prozhmi, Director of Promas Builders, a multilingual construction company working on the Costa del Sol “expats haven’t been put off buying in Spanish by Brexit or the pandemic. From our perspective, Spain is just as popular with foreign investors as it has ever been”.
Investors are ready to spend money again
There had been some assumption that investment in Spanish property might be slow to grow following the pandemic. Undoubtedly it has been a challenging time for everyone, and there had been predictions that the country’s real estate market might be relatively slow to recover. But this doesn't seem to have been the case at all.
Investors are ready to spend with the number of mortgages taken out having risen by 31.5% over the course of the year. It is likely that many who were interested but unable to invest during the pandemic have now seen the strength of the market and have chosen to act quickly.
Desirable for many markets
“In recent years, many are deciding to rent their holiday homes and increase their income, getting a healthy return on their investment,” says Dhaval Patel of Universal Partners FX “even if you use the property as a holiday home, you can still rent it during those months you are back in the UK. Since Spain, like many other Mediterranean countries, is a popular holiday destination, with a holiday market that is growing, such a decision makes perfect sense.”
This raises an important point that might provide key insight into the popularity of Spanish property; it has such broad appeal. Whether you are looking to buy a property as a place to live with a young family, a retirement property, a holiday let or any combination, Spain can make the perfect choice.
Spain appeals to multiple markets, and this is what has always made it such an interesting option from an investors perspective.
Understanding location is more important than ever
Of course, if you are thinking of investing in Spanish property, it is essential to understand where. Choosing the right location can completely transform your investment and its growth potential, so it is really worth doing the research and working with local real estate experts to get the best possible understanding of what you are buying.
Generalising about the popularity of areas like the Costa del Sol is fine - but it’s only local experts who really have their finger in the pulse and can provide up-to-date information on the areas seeing the most interest.
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