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Many people from all around the world have a desire to purchase properties in Spain, either to relocate to the country or as a lucrative investment opportunity. In this article, we will be discussing the current trends and prices of apartments and houses in Spain.
In most Western European countries, people prefer to rent properties rather than purchase them. However, in Spain, the opposite is true. Only 30% of all properties in the country are houses, while the rest are apartments. Rentals are mainly popular among young people and seasonal visitors.
The following are the key trends that are expected to shape the Spanish real estate market in the coming years:
Moderate Growth Forecast In 2023, the real estate prices in Spain will be affected by inflation, increasing interest rates in the Eurozone, and rising energy costs. These factors will cause an increase in demand for rental properties, a modest rise in home values, and a reduction in the number of property purchase deals. In 2022, the number of property purchase deals in Spain increased by 7%, but it is only expected to rise by 1-2% in 2023. Most potential buyers are expected to wait and observe regional and global news.
Consumers Drove Prices Up When Spending Their COVID Savings During the pandemic, people spent less money than usual, mainly because they could not travel or have fun as freely as they did before. At the same time, many realized the importance of having a home or apartment with enough private space for each family member. The demand for housing where it is easy to arrange a home office increased as remote work became more popular. Many residents of Spain spent their savings on better apartments or private houses.
Barcelona and Madrid Are Becoming Less Attractive for Investors The prices of accommodation in these two cities are already high and are unlikely to rise significantly in the future. The same can be said about rent. Additionally, both Madrid and Barcelona lack free space for new construction. It makes sense to buy properties in these cities only if you are planning to live there.
Coastal Areas are the Smartest Option for Investors From an investor's perspective, the coastal areas are the smartest option. Malaga attracts many expats and is developing rapidly. Valencia offers the same climate and level of hospitality as Barcelona, but the prices there are much more affordable.
Expats Keep Investing in Spanish Real Estate Most foreign buyers come from other EU states, primarily France and Germany. UK consumers are also still active after Brexit, but they may need to collect more papers.
Real Estate Market Will Keep Growing Construction and tourism bring significant income to the Spanish economy. Developers will likely keep creating numerous new residential areas in different regions of the country. Such areas will attract foreign investors without a doubt.
Prices Will Be Likely to Keep Rising Due to high public debt, the government might implement extra taxes on banks, which could result in an increase in mortgage interest rates. The regional authorities might also increase selected taxes, which could be sensitive for foreign investors.
Level of Automation Will Increase Thanks to online services, the process of finding the right property and purchasing it has already accelerated considerably. In the next few years, it will become even faster, and the number of intermediaries involved will decrease. However, foreign investors should not overlook the assistance of an experienced consultant. Such a professional will help them avoid excessive costs and ensure that their deal is impeccable from a legal viewpoint.