During the first 10 months of 2017, foreigners bought on the upside 66,190 homes in Spain. Especially the British, the French and the Germans invest in Spain and come to live or stay there en masse, but after those three European great nations come the Belgians. And there are a lot less of us.
66,190 foreigners, they can’t all be owls. On the contrary, invest in Spanish real estate and you are doing a golden business. Or why do you think we christened our little company Gold Estates?
Now don’t take our word for it. Most of all, read on and you will come to that conclusion yourself.
Towering quality of life for expats
Ask expats why they love living in Spain and the first spontaneous answers will always be the same: the pleasant climate, the rich culture and beautiful nature, the gastronomy to lick your fingers and thumbs off, the unhurried lifestyle, the cheaper cost of living, the beautiful beaches and the warm, hospitable people.
Then urge those same expats long enough, force them to think beyond the cliché. They will then tell you about the ease with which they gained a foothold in Spain, about the welcome they received there. Cheap and regular flights are also an asset. Within the few hours you are from anywhere in Belgium to anywhere on the Spanish south coast.
Perhaps they brag about the health care system – among the 10 best in the world – or the Spanish school system, which is open to foreigners. Possibly they know that Spain is the healthiest place in Europe to live, according to the World Health Organization (WHO), or that no European people are getting older than the Spanish.
Who knows, they may even utter a word about the language, which is easy to learn and has the second most native speakers worldwide after Mandarin. A Spanish language immersion literally opens the doors to a whole new world.
In short, the quality of life for expats is sky-high in Spain. And not only for retirees who like to spend their old age in the Spanish sunshine, but also for young couples and families.
But we won’t talk about that too extensively in this blog post. After all, you don’t want to know why it is blissful to live in Spain, you do want to know why investing is golden. Patience, we will get there.
Possibly you are skeptical. Again: your right. Not too long ago, Spanish real estate evoked all sorts of unpleasant associations – junk loans, developers who went bankrupt, projects that never got out of the risers, desperate homeowners who had to return their keys.
Until 2007, trees grew to the sky in Spain. In the real estate sector, it couldn’t stop, prices shooting up. But that beautiful song came to an end: the carefully constructed house of cards collapsed and dragged Europe into crisis.
But: after one of the longest and deepest recessions ever, the Spanish economy is quietly recovering. More to the point, Spain has the wind at its back in 2018. Not only do we say so, the world’s most renowned independent financial advisory bodies say so. Spain’s economy is the fastest growing in Europe, according to the IMF.
There are jobs again and the big investors are returning to the country. The economy stands on firmer foundations. All that good news makes for better living standards for Juan with the cap. Experts suspect those trends will only continue.
Margin for growth
But what does all of the above mean for the real estate market in Spain? After the crisis, there was a blow to the quick – in fact, a lot of houses came onto the market below price. In 2013, the downward trend reached the bottom of the valley; since 2014, prices have been rising again.
Had you invested in Spain a few years ago, the value of your property would have increased by 20 or 30 percent in some areas. Per year! And although the real sales are over, there are still sporadic bargains to be had.
In fact, it is the ideal time to invest in real estate in Spain. Indeed, real estate prices are far from peaking. While rental and sales prices are at the limit in many European countries, in Spain there is still a lot of margin, still a lot of potential for price growth. Here the buyer still gets real value for money.
Investing in Spain is better than a savings account
What drives that price up? The demand that keeps on growing, tens. Economics 101. We mentioned earlier that Belgians, Brits, Germans and other climatically less fortunate Europeans like to soak up the sun. Unless climate change gifts Ostend and Wenduine with palm trees soon, this is not likely to change.
So demand is not likely to cool soon. And that which is in high demand rises in value. This means that buying today equals making a profit as early as tomorrow. It gets even better if you buy on plan: you pay a lot less, but can sell afterwards – if you like – at market prices. Cash register, ching-ching.
Compare that to your savings book in the bank – where the wind is howling and so quietly tumbleweeds are rolling through. No, those pennies in your savings account don’t bring in a dime. You might as well keep them in your sock. And then why not opt for living in Spain right away? Matter of combining the useful with the pleasant. You notice: a little smart investor has long put Spain on his wish list.
Loans at attractive rates
Not insignificantly, Spain has learned from the crisis. Construction promoters are less likely to get loans from the bank, significantly reducing the likelihood of bankruptcy. Whereas before the crisis developers were mainly aiming for more, bigger and more spectacular, now they are building on a smaller scale but with more quality.
Building standards have gone up and there is more professionalism. Where real estate buying anno 2007 was Russian Spanish roulette – will my residence finish or not? – you have a much better chance of success a good ten years later. Of course, even so, it is still best to buy with the help of a patented broker, just a matter of playing it safe.
Fortunately, buying property in Spain is not the deliverer of migraines that it is in some other countries. Realizing the importance of the real estate sector as a pillar of the economy, the Spanish government is trying not to put too many obstacles in the way of buyers.
Moreover, Spanish banks are only too happy to lend to foreigners, at attractive rates. Do have the assistance of a lawyer.
Rental income for the taking
If you buy a second home, then it is a good thing if you can rent it out when you are not there. This is how the house or apartment pays for itself.
In that regard, it is good news that package travel – once wildly popular – is quietly losing its plumes. The average sunbather is no longer satisfied with a concrete resort and the tedious towel fight for the best poolside spot. The democratization of the travel industry is leading more people to dream of an experience.
Vacationers are now scouring the Internet in search of dream destinations. They book their own tickets and also want to find their perfect dream home-for-two-weeks by themselves. Ideal if you have something on offer.
At the same time, Spain is also not too adventurous. There are plenty of restaurants and bars, and as a tourist, you don’t have to speak Swahili to find your way around. Spain balances perfectly on the tightrope between exoticism and familiarity. That is why 50 to 80 million tourists annually find their way to Spain, the second most popular vacation country in the world after the U.S. Plenty of applicants, then, who are willing to help pay off your shell.
Do you want to rent out, but don’t feel like the accompanying hassle? There are organizations that are happy to help you with the practical concerns, in exchange for a crumb of the cake.
Perhaps you now realize what possessed those 66,190 foreigners in 2017 when they bought a property in Spain. And who knows, maybe you will belong to that wreath in 2018? Gold Estates is ready to provide more information and work with you to find your Spanish dream home.