Property investment in Spain can be fruitful and rewarding. The abundance of art and culture, sumptuous cuisine and fine wines, enchanting historic cities and pristine breaches make Spain a highly popular holiday destination.
Not only does investing in property provide you and your family with a private holiday home, it will be there for when you decide to retire also. Alternatively, there is the potential to sell your Spanish property for a profit.
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In the meantime, consider renting the property as a holiday home. Spanish villas in popular resorts like Marbella and Costa del Sol provide you with the potential to earn a second income.
Moreover, if you recruit a real estate agent in Spain to handle bookings and property management on your behalf, you can earn a profitable income for practically zero effort.
In this article, we will discuss why now is the best time to invest in Spanish property, what you need to do and the pitfalls to look out for. According to economists, Spain looks like the most lucrative European country to buy property right now.
Expected Returns From Property Investment in Spain
Spain was one of the hardest-hit countries during the global coronavirus pandemic. Its housing market was hit quite dramatically with property values plummeting by six per cent.
Falling house prices mean there is an opportunity for foreign investors to purchase a second home in Spain. The Central Bank of Spain estimate house prices will start rising gradually, although the estimate of a full economic recovery is forecast for 2023.
The upshot of the economic downturn is that property investors have some time to identify lucrative properties that will deliver a significant return on investment.
Having said that, Spanish estate agents say they are already starting to a slight pick-up in the housing market. The initial crash during the lockdown had been as high as 18.5%.
Economic forecasts for property investment in Spain look promising. The property rating agency, Fitch Ratings, forecast the Spanish housing market to fall by at least 8 per cent this year. It could even be as high as 12%.
Compare this to a predicted four per cent slump in Germany and between 3-7% in the UK, and it is clear to see that property investment in Spain offers the most lucrative package.
There are estimates that along the Costa del Sol and in the south could present an excellent opportunity for property investors.
After the 2008 housing crisis, bargains emerged in prime areas such as Marbella and Alicante. Experts expect to see similar patterns – although, with banks in better health, the recovery will be quicker this time around.