For the last year, that damn coronavirus has been turning our lives firmly upside down. There was also a lot of uncertainty for people with Spanish dreams. One was afraid to take the plunge in times of pandemic, another was struggling financially (temporarily or otherwise). And a third saw no practical point in jumping into the deep end just now and postponed the dream.
But every crisis presents an opportunity. COVID-19 painfully demonstrated how fragile our existence really is. Maybe it’s just the kick in the butt we need to make our dreams come true. To take more rest instead of working our way toward the grave. To spend time with family and loved ones. To gather your courage and finally get to work on that dream home on the Spanish costas.
For those still in doubt, we give 8 reasons why it is a good idea to buy a home in Spain in times of corona.
1/ Housing prices have fallen
In 2019, the number of home sales in Spain stabilized. The corona crisis reinforced that trend in the short term. Because some Spaniards had to deal with financial setbacks, and tightened their belts, a lot fewer homes were sold in 2020. According to some sources about 20 percent less, others even speak of 30 to 40 percent.
As a result, its price also declined, although it depends on the location and type of home. In November 2020, the average price of a home fell 5.7 percent, according to Reuters. It quotes an association of Spanish notaries for this purpose. The reason is simple: while more homes remained on the market, sellers lowered their prices.
The price drop applies especially to second-hand homes and residences in popular tourist areas, such as the Costa del Sol and Costa Blanca. Houses and villas in the most expensive segment also became a tad cheaper. Consequently, in the short term, there are bargains to be had. Prices for new homes did largely maintain, as developers are not desperate to sell.
2/ This is the time to strike
It’s a matter of conjecture whether prices will fall further. Some experts believe so and predict a decline of six to ten percent by 2021. Starting in the fall, they said the housing market would start to recover slightly. Again, there is a big difference between regions and types of houses.
Still, you’d better not speculate on that. This is the time to strike. Those who doubt now may pay a price for it. The
window of opportunity
is small, according to Standard & Poor’s forecasts. The renowned U.S. credit rating agency took a close look at the European housing market in late 2020. Spain stands out as a special case. Let’s take a closer look at why.
According to Standard & Poor’s, in 2020, house prices fell almost nowhere harder than in Spain -1.4%). Only Ireland exceeds that figure (-1.6%). All but Portugal are the only European countries where houses became cheaper in 2020. In Belgium, the price rose by an average of 1.8 percent, and in the Netherlands by as much as 6 percent. Spain’s decline is in line with a report launched by the International Monetary Fund (IMF) in October. From that, the Spanish economy emerged as one of the hardest hit in Europe. GDP declined by 12.8 percent in 2020.
But – now comes the cat on the string – starting in 2021, according to Standard & Poor’s, house prices will start to rise again. At first it was modest, at 1.8 percent. But by 2022, it is already up to 4.5 percent. Then suddenly Spain is one of the fastest risers, along with Ireland (4.6%) and Portugal (5%). You understand why 2021 is such a crucial time to buy a home in Spain. We are currently in the trough of a chart that dra will start to rise again at lightning speed. Make your move.
3/ Those who wait too long have a lot more competition
In uncertain times, it is not illogical that you are watching the cat from the tree. But consider that you are not the only one in that situation. Across Europe, baby boomers are retiring, and many of them prefer to do so in the company of pleasant sunshine and a tub of sangria. All are counting down their moment to buy after the pandemic. In other words, there are a lot of people coveting real estate in Spain. Expect a pack of buyers to flood the market.
On top of that, many people were saving during the pandemic. Those who were not financially affected by redundancy or temporary unemployment could set aside money that would normally have been spent on dinners, long evenings in bars, and trips to exotic destinations. As a result, savings are larger than usual, which again according to Standard & Poor’s will soon lead to higher prices in Spain.
Outshine everyone else by anticipating.
4/ Long-term return on investment remains guaranteed
In the short term, real estate experts say, returns are difficult to predict. As long as the crisis rages, there are too many uncertainties. But in the medium and long term, experts have a good eye on it. House prices will pick up again. Again: many baby boomers want to spend their retirement in the sun. According to forecasts, 600,000 new homes will be needed in Spain for them alone.
Also, the housing market is on much firmer footing than it was during the credit crisis of twelve years ago. Back then, developers built a lot on speculation. They pulled up large-scale new construction without having a buyer. That cowboy behavior has largely disappeared. Households and businesses are also financially healthier than they were then, and banks boast better solvency and liquidity. The storm can be better weathered. As a result, fears of a new real estate bubble are non-existent in Spain.
5/ There are opportunities in the rental market
Even after the pandemic, tourists will opt more for accommodation that offers security and privacy. Apartments, whether rented out through platforms such as Airbnb or not, are then preferred to mass hotels where everyone walks in and out. This opens possibilities for those who want to rent out their second home to tourists during certain periods.
6/ Money in a savings account is worth nothing
This in itself has nothing to do with the coronavirus. Low interest rates are nothing new, but they remain a compelling motivation for preferring to put your money in bricks.
7/ Through corona we adjust our lifestyle
Those who were confined to a 50-square-foot apartment during the lockdown may appreciate the outdoors more than ever. And where better to enjoy that than on the Spanish costas? Up to 320 days a year of sunshine, you can have your morning coffee on the terrace here even in well of winter.
COVID-19 also led to a change in our work life. Office workers were more likely to do their jobs from home. It is expected that employers will continue to give their employees more freedom of movement after the pandemic. Working a week from your second home on the Costa Blanca? In the future, it can be done more and more often.
8/ Life is short
Corona confronted us with the preciousness of life. And the importance of enjoying it when you can. Stop procrastinating. “
I’ll buy a house in Spain when the kids are out of the house/when I’m retired/when I have some more savings.”
Stop with the excuses. Jump now, or it may be too late. Life does not begin under the headstone. Don’t let precious time go to waste anymore. Ask yourself the question: when the vaccine soon liberates us all, where do you want to spend your time?