Is 2018 a good time for a second home in Spain?

Were we given a euro for every time we heard this question, we could long afford a second home in Spain.

Many Flemings ask us if 2018 is the right time to invest in Spanish real estate. They do dream of a place under the Mediterranean sun, but still have some cold feet. Many remember the ominous news reports about the Spanish real estate crisis, a decade ago now. At the time, the Spanish economy was much like a train wreck.

And so the cautious Fleming hesitates.

But it is a good trait to recognize the right opportunity when it presents itself. When someone asks us which is the best time to invest in Spain, we answer:
“Now, not seffens, not immediately, not subitively, not soon, but now! Maintenant, tout de suite, heute goddammit!”
With the permission of the great Raymond.

We collected 8 pieces of evidence that show that 2018 is the time to invest in a second home in Spain.

Evidence 1: Economic experts say so

Before you accuse us of speaking for our own store, we are not the only ones who think 2018 is the time for action. In a comprehensive report, the reputable Bloomberg News called Spanish real estate “another hot buy” in December 2017 .

hot head

Yes, patch! Our photo editor thought of a “hot head.

“This is the year when everything comes together,” says Ismael Clemente of Merlin Properties, a major European real estate investment fund, “The Spanish economy is doing well, the banks are healthy and a very good legal framework has been installed tailored to investors. And properties in Spain are still cheap compared to those in many European cities.”

Evidence 2: The economy is doing just fine

Spain’s economy is bulging much more smoothly than most of the rest of Europe. And the Catalan issue changes little or nothing about that. Growth in 2017 is 3.1 percent, and the forecast for 2018 is 2.6 percent. By comparison, that of Belgium is 1.7 and 1.8 percent, respectively.

Unemployment has also not been this low in nine years. By 2020, Prime Minister Mariano Rajoy wants 20 million Spaniards working. All these figures have a favorable effect on consumer and business confidence.


By 2020, 20 million Spaniards should be working.

And that attracts foreign businessmen with deep pockets. Major international funds are pumping massive amounts of money into Spain, especially the Costa’s. They invest in malls, department stores, hotels and offices. The crisis is only a distant grim memory.

Evidence 3: Banks have recovered

Banco Santander

Banco Santander is the country’s largest.

When the Spanish real estate bubble exploded, governments needed to bail out the banks. Otherwise, they were guaranteed to go head over heels.

Meanwhile, Spanish financial institutions have completely changed course. Once saddled with junk credit, banks are now managing to rid themselves of that ballast much better than their counterparts in the rest of the EU. Feel free to call it a detox.

This also has next positive consequence:

Proof 4: Mortgages are spotty.

There is no more talk of a bubble. The government has so regulated the banks that they now put financial security above all else. However, the historically low base rate in the EU allows Spanish banks to offer mortgage loans that are cheaper than ever.


And they do so very smoothly. In January 2017, banks handed out 17 percent more mortgages than in the same month a year earlier. Spanish lenders, in other words, are particularly eager to, er, shoot money. Also to foreigners, provided they can present a good credit rating.

Evidence 5: The real estate market is thriving

“When the global financial crisis broke out, the phones stopped ringing overnight,” said Fernando Rodriguez de Acuna Martinez, director of a real estate consulting firm. “They remained silent until the Spanish banks were bailed out in 2012.” Since 2013, there have been signs that the market is on its feet.

real estate deal

Investment volumes have only increased since then. Whereas buyers invested 1.9 billion euros in Spanish real estate in 2011, in 2017 it is already 8.9 billion. According to the Spanish Institute of Statistics (INE), more residential properties were sold in Spain in 2017 than in any of the previous nine years. And the ceiling is far from in sight.

Evidence 6: Quality improves

Today’s developers are not the same as those of a decade ago.

In 2007, their main concern is quick money-making. High-quality materials? Oh well, cheap junk will also suffice. The right papers? Is that really necessary? Result: potential buyers have to deal with bandits who would sell their mother-in-law if they can get a pretty penny for it.

mafia developers

This is what real estate developers looked like in 2007.

Those weeds have largely been weeded out. The current generation of builders is a lot more professional. New projects are of high quality, adapted to individual needs and with regard for laws. Open spaces, energy efficiency, these are all trends that Spanish developers are also responding to in anno 2018. Quality is more important than quantity.

And yet there is plenty to choose from – from simple apartments to opulent villas, in a variety of locations and for different price ranges. How do you say “something for everyone” in Spanish?

Exhibit 7: Real estate prices are nowhere near their peak

Market confidence is steadily increasing demand. That doesn’t miss its effect on prices. These go up – by an average of 4.7 percent for private residences in 2016, 6.1 percent in 2017. And yet you can still find bargains in Spain. Because although sales volumes are now at 2006 levels, prices are far from reaching them. These are still 25 percent lower. So there is still plenty of room for further increases. Or as Yazz sang in the late 1980s:
the only way is up!

With the market in full recovery, this is an excellent opportunity to invest. Because: later you are guaranteed to be able to sell at a sharply increased price. But you may not be buying as an investment. Maybe you just want to enjoy the sun and good food in Orihuela Costa or La Zenia? Then, too, 2018 is the time. After all, in a few years you will be determining a lot more for the same home.

Exhibit 8: Rental potential is huge

After the U.S., Spain is the most popular vacation country in the world. And all those tourists have to sleep somewhere.

Many people are tired of the mass hotels on the Costa Blanca and Costa del Sol. They don’t like the impersonal service, reheated food from metal trays for dinner and the loud Russians who try to break the world vodka drinking record every night in the adjoining room, of all places. Studies suggest that tourists prefer to stay in smaller-scale accommodation. Consider also the success of Airbnb.

drunk Russian

“Damn, drunk Sergey is at the door again.”

Bingo! Rent out your second home and the investment partially pays for itself. Especially on the Costa’s, the returns are significant. After all, you don’t just rent there in the summer – the other seasons smoothly lure vitamin D-loving northerners as well. Bring on the champagne cava!



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