Buy a Property in Spain: Top 5 Best Places to Buy in 2021
As we head firmly into 2021, more British expats are moving abroad and looking to buy a property in Spain for a better lifestyle.
Property investors are searching for competitive returns in Europe’s top housing markets. It is no doubt that Spain is still among one of the best places to buy a property in Europe in 2021
International buyers have made roughly 20 per cent of all of the property transactions in Spain and Britons have traditionally been the number one people who favour living in Spain
Our currency experts here at Halo Financial have considered all the challenges, risks and necessities to keep in mind when moving to Spain. So, whether you are looking for a holiday home, a property investment or just an abode to live in at a later date, here are the top 5 places to buy a property in Spain in 2021.
Best Places to buy a home in Spain in 2021
5. Valencia
Property sales, foreign demand and rental prices are all soaring in Valencia. It is a popular choice for those who desire a sought-after Mediterranean lifestyle when living in Spain. In fact, 35.6% inhabitants of Valencia are from overseas.
Nearly one out of every three sales in the region goes to foreigners and sales are also growing rapidly, up 16.7% year-on-year.
Rental properties are also a popular choice in Valencia, while the sought-after area of Puerto de Sagunto saw rental values rise by 21%, according to Idealista.
Demand is rising rapidly as average rentals in Spain rose by 2.7%to €8.52 per sq. m. in the first half of 2019 Prices average €1,816 per month, nearly half of those in Madrid. Most foreign rental clients are either from the United Kingdom or the United States.
4. Property in Madrid
Madrid is a particularly expensive community when it comes to renting homes in Spain. An average monthly rent is EUR 13.51 per sq. m. in H1 2019according to Fotocasa.
Agency, Anticipa Real Estate, estimates that the market will continue in that vein, increasing 11.9% in 2019. In some popular areas of the city, houses have already exceeded the previous peak of 2007.
As you would expect, Madrid is a top target for people moving to Spain and for investors. In the first six months of 2018, there were 4,911 Spanish property sales to foreigners, an annual increase of 5.4%.
Madrid property is now close to its peak values of 2007. Property buyers also show a high degree of contentment with their purchases. According to a study from Spanish property developer, Vía Célere, 91% of respondents living in Spain were happy with their Madrid home.
3. Property in Málaga
Málaga is a top holiday destination and so it is ideal for those moving to Spain to bring about a lifestyle change or to retire. Being a popular destination, property prices are increasingly strong. The number of transactions in Málaga during the second quarter of 2019 has risen from 6.349 to 8.229, which is an increase of 31%. And they are set to continue to rise, market experts believe.
Despite strong property price rises, apartments can still be found in Málaga at under EUR 175,000. If you are looking for rental options, then Málaga is also worth consideration.
Málaga City showed an annual increase in rental prices of 4% in September 2019, ending the month on EUR 9.9 per square metre according to Idealista.
2. Property in Murcia
Murcia has seen an increase in international purchasers, up 9.6%. According to Idealista, house prices in Murcia have increased 2.8% in 2019.
Market experts believe the strong demand is set to continue. The area is very popular with British buyers who dream of buying a house in Spain. Around a quarter of sales in Murcia go to foreigners and an overwhelming 57% of those home sales involve Britons. That means that one in six properties in the Murcia region was bought by Britons.
As well as having high property ownership figures, Britons also account for a high level of tourism each year. Following just behind, Germany is the second highest for tourism and property purchases in Murcia.
The new Murcia International Airport at Corvera opened in January 2019, which is likely to open up more flight options for European travellers. This should include low-cost routes from the UK. Whenever new flight routes are launched, countries usually see an increase in property sales.
1. Property in Mallorca
Mallorca has been a long-time prime property hotspot when it comes to moving to Spain, thanks to its wonderful weather, spectacular coastline and mountain scenery and a choice of luxury homes.
In fact, the EuroWeekly website calls Mallorca the perfect place for a second home. Foreign buyers are very active in the market, led by British and German buyers.
Kian Khaleghian of Von Poll Real Estate, with 320-plus locations internationally and six in Mallorca, says, “You have all the amenities that come with living on an island of a million inhabitants, many of whom are English and/or German-speaking. The Island benefits from state-of-the-art hospitals, historic sites, plenty of art and cultural events, an immense variety of world cuisines.
The leading luxury lifestyle magazine, ABC Mallorca, refers to Puerto Portals as “the place to see and be seen during the summer where you’re more than likely to catch a glimpse of a few famous faces” including Hollywood stars, business titans and sports legends.
Local agent, Redhawk Real Estate International, says although new construction levels remain relatively low compared to a decade ago, Mallorca and Palma saw several relevant new developments in the Bonanova and Nou Llevant areas.
These state-of-the-art apartment complexes with amenities such as pools, spa and green garden areas, add several hundred residential and commercial units to the local property market in the next five years. At the same time, developers complement the local government’s plan to redesign the east end of Paseo Maritimo into a pedestrian-friendly and year-round shopping destination.
To sum up, in the next few years visitors and residents alike will experience a new layer to Palma’s real estate market and the beginning of the expansion of Palma’s Old Town shopping district to the east side. The local real estate market supply-side increase, coupled with the new government restrictions regarding apartment holiday rentals, will most likely encourage a market price adjustment in the city’s apartment property market pricing going forward.
Why buy a property in Spain?
Property demand in Spain is rising – boosted by a growing number of international buyers. There were 352,768 older properties sold in Spain in the first months of 2018, up 11% over the same period in 2017, according to data from Spain’s Institute of Statistics. Funnily enough, there was a similar rise in new home sales, up 12% annually to 62,318. That is the equivalent of 18% of total sales, a similar proportion to a year ago. In addition, a record number of foreigners are deciding to buy a property in Spain.
Find more statistics at Statista
From January-June 2018, there were 53,359 sales to non-Spaniards, the highest figures since record began in 2007, according to Spanish notaries. Britons head demand, with 7,613 sales, up 8.8% year-on-year and a total share of 14.3%. The French are second on 4,211 sales, down 4.6% on Quarter 1 2017, with German buyers just behind with 4,138 sales, down 2.1% annually.
The top three nations showing the biggest increase in sales are Morocco on 28.8% year-on-year, Ireland on 24.7% and Denmark with a rise of 18.2%. Spain benefits from warm weather, an affordable lifestyle and cheap flights from destinations around Europe. Here are some leading property destinations.
Sandy Peterson, Independent Financial Adviser with Haven Financial Advisers in Mallorca, said, “With construction only representing around half of its previous weight in the Spanish economy, exports up, and both economic growth and unemployment improving, this paints a very rosy picture for the future of the Spanish economy. Most market commentators would agree that the tide has turned and Spain is on the up.”
Top challenges to buy a property in Spain
1. Buying a property in Spain after Brexit
The fears and insecurities caused by the Brexit negotiations have led the number of British people moving to Spain to rise considerably. The fact that Brexit has had a big impact on international property buyers is no doubt. It caused many people seeking to make their next life-changing move being held back by countless doubts and wonders. People began to question, “should I buy a house in Spain after Brexit?”, “Is it a wise choice?”, “is it safe?” or “can I even do this?” The answer is YES.
Not only you are fully able and have every right to buy a property in Spain, but the Spanish government is constantly motivating both EU and overseas residents to make this move. To give an example, the Golden Visa Scheme is a type of permit that encourages foreigners to realise investments in Spain, including moving to the country.
Not only you are fully able and have every right to buy a property in Spain, but the Spanish government is constantly motivating both EU and overseas residents to make this move. To give an example, the Golden Visa Scheme is a type of permit that encourages foreigners to realise investments in Spain, including moving to the country.
2. It is getting more expensive to buy Spanish Property
Although the majority of British people choose Spain as one of the top destinations to emigrate to, there has been a big decline in residential Spanish property sales figures. This was mainly caused by rising house prices, which makes it more difficult for people to buy property in Spain. The price is continuing to rise in the areas and streets of the big cities as property supply is scarce. Additionally, properties’ price rose in all Spanish autonomous communities over the last year, which intensifies the challenges for foreigners to make the investment.
3. Change in Spanish Mortgage Rules
In June 2019, a new law was put in place for Spanish mortgages. The aim of the new law was to improve the transparency and behaviour of mortgage lenders.
After the new regulation was implemented in June 2019, the number of mortgages issued in Spain decreased by 1% in comparison to the same month one year ago. Currently, the average mortgage interest rate in Spain is 2.53% with an average duration of 23 years.
Whilst the new law has positives and adds extra protection to homeowners, the new law could also provide challenges to expats who are outside the Eurozone. The new rules mean that mortgages can be requested to be converted to local currency. This then can, in turn, create a risk with exchange rates. It is, therefore, important to consult with a financial advisor if you are considering moving to Spain and applying for a mortgage.
Are you thinking of buying a property in Spain? Contact our currency and overseas property experts who will provide expert guidance on your next life-changing move.
Thinking to buy a property in Spain? Contact our currency and overseas property experts who will provide expert guidance on your next life-changing move.
