Spain is renowned for it’s beautiful architecture, regional cuisine and pleasant climates. So it’s no wonder that it’s long been the most popular holiday destination for British sun seekers. However, with rising property values, a high availability rate and an undervalued market, many other foreigners are starting to invest in Spanish property.
Although Spain was hit hard in the 2008 housing market collapse, it has been slowly recovering ever since and with some of the strongest rates of growth recently recorded, prospects are looking good.
During the second quarter of 2016 housing prices increased 0.83%, after two consecutive quarters of growth, based on figures from TINSA. Land transactions also rose by 7.2% in the first quarter of 2016 and urban land prices rose by 5.3% during the same period, according to the Ministry of Public Works.
Foreclosures were down by 14.7% from the previous quarter at the start of 2016 and down by 36.7% from the same period the year before, according to figures from the INE.
Much of the recovery has been driven by foreign investors purchasing retirement and second homes and with the dollar strengthening against the euro much of the interest has been coming from the United States.
Spain has also been seeing a lot of investment from other non- EU countries such as Russia and China due to incentives like the Golden Visa, which grants citizenship and residency to foreigners who invest over €500,000.
And it appears to be working, the program was instated in late 2013 and by 2015 housing purchases were up by 13%, based on figures collected by Property Registrars. That year foreign homebuyers purchased around 48,000 homes in Spain alone.
Where to Invest
Investing in populous urban areas such as Madrid and Barcelona is always a pretty sound choice. Urban areas have experienced the most consistent growth over the past decade, with an increase of 5.3% in the first quarter of 2016 and an average of €508.9 per square meter, according to figures released by the Ministry of Public Works. That’s not even mentioning the allure of their renowned architecture, world-class museums and bustling markets. The sheer vitality and liveliness of these capitals are enough to intoxicate any passerby and make it difficult to leave.
However, if you are investing on a budget, weekend getaways may be where you find the best deals. Northern coastal towns like Cantabria and Asturias offer some of the countries most picturesque views and some of its lowest land prices. Here you can take a walk along costal beaches or hit the slopes at some of Europe’s premier ski resorts.
Or if you’re looking for something a bit more Mediterranean check - out Tarragona on Spain’s eastern coast. Located just an hour south of Barcelona, this charming town boasts some of Spain’s most beautiful castles and ancient Roman architecture. Take in the sights and cap the day off by enjoying a bottle of Spanish wine in one of Tarragona’s famed cafes.
Remember- the key to getting value out of a long-term second home is to ask yourself: “would I want to live here in five years?” Chances are you’ll never want to leave.
