Anyone considering buying a Spanish property either as a retirement residence, holiday home, rental investment or simply to enjoy a new culture and better quality of life, will be aware that it remains an extremely popular and attractive market. Compared to the crash in 2008 British purchases (who still account for the highest proportion of overseas buyers) are up ten times – with an average of over 40 transactions being completed each business day.
Just because the market is buoyant never necessarily means that it is savvy to invest. Yet when it comes to making an overseas property purchase there are plenty of reasons why Spain remains an excellent choice, especially for those wishing to make a solid return on their capital. Here are some of the essential reasons why investing in Spanish property is currently an excellent proposition.
1) A Reliable Opportunity For Overseas Buyers
Spain has long been a popular option for overseas buyers and while there are certainly some legal complexities involved, there is an established and highly professional services market to help facilitate property purchases. Buyers will have no difficulty finding experienced estate agents (who speak fluent English), solicitors, building surveyors/conveying services, and so forth who often make their entire career focused on helping overseas purchases. Just take a stroll around the Costa Blanca and you’ll see that almost all estate agents have English signage.
Brexit may have caused some ripples in the market at first, but all indications are that despite the decreased value in Sterling that Spain remains most people’s #1 choice. It is, to put it simply, a straightforward option for those desiring a high-quality home. It is extremely unlikely that Brexit will cause any serious issues with overseas property owners. The only realistic headaches may arise in a more complicated/difficult system in a couple of years’ time (2021 & later). Remember that the overseas property market employs tens of thousands of Spanish professionals and they are not likely going to want that income to vanish overnight!
2) Solid Growth Patterns
House prices are still recovering from the crash a decade ago but are doing so at a stable rate of growth. Compared to much of the rest of Europe, Spanish prices are still around 12-15% cheaper than they were before 2008. Compare that with UK home valuations increasing by 42% over this decade, and that equates to a lot of equity which can be redirected towards picking up Spanish bargains. Madrid and Barcelona are two of the most desirable cities in Europe and are two of the best examples where local property values do not yet manage to reflect that status. Anyone looking for a ten-year return on investment should be looking at those two alongside other major Spanish cities and the ever-popular Costa regions.
Another trend which is starting to make major waves in the Spanish property market is first-time buyers opting to make Spain their first true home – and why ever not? Property prices are representative of genuine quality (especially compared to the UK) and mortgage rates are some of the lowest in Europe. 2% deals are the norm and not the exception, plus that is for the duration of the loan and not a short introductory rate.
3) Spain Is Growing & Attracting Investment
Whereas not too long ago UK financial planners would have always said ‘buy British’ for those looking to invest in property, the uncertainty over the domestic market allied with the fact that the Spanish economy is expected to rapidly expand in coming years makes this a far more preferable option. It is no secret that UK property values are worryingly close to bursting point – while those in Spain are comfortably forecast to continue to grow for a long while.
Once again, the large cities are the place to look for properties that will attract good rental yields. In fact, Madrid and Barcelona currently offer the best in Europe, making them ideal for both year-on-year rentals or 50/50 split residencies. To put it bluntly, rental income will not just cover the cost of the mortgage – you will expect to make a good monthly return!
The Spanish property market learned plenty of lessons over the rather harrowing crash of a decade ago – and it is worth remembering that much of that was caused by global influences outside of local control. While the market has steadily recovered there is still no shortage of outstanding financial reasons why Spain should be considered an excellent opportunity. Buying property in Spain is relatively straightforward providing you use high quality local professional services, and certainly far easier than many other countries. So, whether it is for a place to live or as a potential income stream, you may well wish to take a very serious look at the potential offered by purchasing a Spanish property.