The Spanish property market is a brilliant place to invest your spare €100,000 right now. Since 2014, property prices have been on a steady rise, but are still lower than in 2008. The Bank of Spain released a report in November 2018 saying that returns on the real estate market sales are up by 11.2%. Rental yields are soaring while buying floor space per square metre remains relatively good value in comparison to the rest of Europe.
Spain: An overview
Islands like Mallorca and Fuerteventura have experienced huge growth in interest from buyers in 2018, with Mallorca especially bucking the trend of a slow and steady gain and seeing almost 20% more potential buyers searching the island for an investment property.
The sunny Costas still vary hugely in price, but provinces keeping the average price of property down below €150,000 include Murcia, Almeria and Tarragona. Murcia includes the Costa Cálida, which means ‘the warm coast’, and is well known for its healthy salt lagoons, fabulous climate and outdoorsy lifestyle. Almeria has the bohemian Costa Almeria, rich with Spanish traditions and adventurous inhabitants. Then there’s Tarragona, with the almost undiscovered Costa Dorada, in the cooler northern Mediterranean coast which is close to Barcelona – the city with the highest rental yields in Europe.
The type of property in demand varies across the provinces, but you can expect pretty high demand for apartments in most parts of Spain, especially those on the cheaper end of the scale (less than €150,000). It is still possible to get an apartment in Spain for less than €50,000 but it might not be for long.
Invest in a buy-to-let in Spain
With the property market in Spain in recovery, now is a great time to purchase the buy-to-let apartment you’ve been dreaming of. For a buy-to-let, you need to secure a low asking price for a property with high rental income potential. Read more about financing your purchase in our 6 ways to finance buying a house in Spain<link to blog>.
There is very high demand for low-cost housing in the heady tourist-trodden parts of Spain, and creeping house prices are making finding these dream homes at a low cost harder than before. Therefore, many people are turning to rentals to make the holiday or relocation they want affordable. Keeping to the more popular coastal regions, looking in towns near major airports with good transport links and ensuring the location enjoys a steady year round tourist trade even out of season are all going to help you make a good return on your investment.
The Costa del Sol is home to Marbella, Mijas and the Golden Mile. English is the predominant language spoken here and the area attracts high-earners. The initial costs of property are higher than in other regions, but the demand by far outstrips supply on housing up to €250,000. Apartments are slightly easier to secure as there is not as much demand although plenty of the small towns found along the coast have seen significant growth in interest from potential buyers.
Flip a renovation property
A renovation is not easy in Spain unless you have good contacts or can do the labour and speak with suppliers yourself. Ruined buildings can be very cheap but this is often because the domestic market demands new, modern builds. A short-term ‘flip’ renovation is very difficult as the resulting sale price might not reflect the work you’ve put in. Have a listen to our podcast with Kyero buyer, Erik, who describes renovating a country house in Javea.
That said, local tradesmen are very good value and can help you achieve a change with a very small budget. Prices for country homes, townhouses or even the villas built in the original 60s tourist boom are usually low cost and can be a great way to get a step onto the property ladder in Spain.
Valencia is a good province for seeking out a country house or villa to renovate. Demand just about outstrips supply and creates some healthy competition; townhouses are in oversupply and so prices may be negotiable. Satellite towns, like Lliria, on the edge of Valencia, are growing in popularity as they offer countryside views and a lifestyle with easy access to both the coast and inner city amenities. Tarragona is where people flock to find crumbling country homes to makeover, and areas like Salou or Tortosa are also seeing growth. Murcia offers lower average house prices, high traffic from tourism, spectacular landscape and increasing strong demand for country homes and apartments.