The Spanish property market has become truly buoyant in recent months – and now might be the perfect time to consider investing in property here. Spain’s property market actually weathered the combined Brexit and Covid storms relatively well. This has made it a fantastic place to invest as more normality returns.
There can be no doubt that buyers of Spanish property from abroad decreased significantly over the course of the pandemic. There was some uncertainty in the market, as well as challenges getting into the country to look at potential property unsurprisingly. If these issues are lingering, there isn’t much sign of it – real estate agents are getting busier and busier.
“There has been unexpected, even exceptional, sales activity in the past year since June 21st, 2020 when the lockdown was lifted in Spain,” says Christopher Glover, Managing Director of Panorama Properties, “ in 2021, the luxury end of the market has accelerated month-on-month to a level of activity we have never witnessed before in our history. The top end of the market, instead of suffering as most had anticipated, has prospered beyond anyone’s expectations”.
This is good news for investors – but does it mean that now is the right time to get back into investing in Spanish property? Here we take a closer look at whether investing is a good idea for you right now.
Investors are primed after the pandemic
Things haven’t been as difficult as some in the property market predicted – but it stands to reason that the pandemic has been affecting customer confidence. The pandemic has been a destabilising force – but things are likely to change quickly as the world ‘returns to normal’. A surprisingly strong performance through such a turbulent time could indicate that the property market is about to truly boom again. In fact, according to official data, the number of mortgages taken out on homes is up 31.5% compared to a year ago.
Property is an investment that always attracts interest – especially in Spain where there is so much opportunity in the form of family homes, retirement properties and holiday villas. Those investors who had kept their head down through the pandemic are now looking at opportunities to invest – and Spanish property suddenly looks extremely appealing.
Property prices rising fast
The Spanish property market was very badly hit by the global recession more than ten years ago. But now prices are beginning to return to those historic highs. Debora Marcus at ABCMoney says: “From the month since the beginning of lockdown, property asking prices in coastal regions have increased steadily with the figures rising by between 0.5% and 1,751 €/m2, depending on the location. The regions that have seen the biggest increase are the Balearics (with an increase of 4.4%) followed by Malaga/Costa del Sol (+3.1%)”.
As more investors become interested in this booming market, the prices are likely to continue to rise rapidly, and it may not be long before we see favourite areas surpassing their pre-pandemic peaks.
Spain is open for business
A challenge with Spanish property purchases has been the difficulty getting into the country to inspect a property before you buy. While not as badly affected as some, Spain effectively closed its borders for a period through the pandemic, which limited the possibility for foreign investment over that time.
But things have changed, and, as we’ve already mentioned, the worst of the pandemic would appear to be behind us. Spain is once again welcoming foreign nationals into the country – so investors can cast their eye over potential investments themselves. This is another factor that is going to speed up the market.
It’s still all about location
Spain’s property market is all about location. The fact is that areas of Spain that have previously been extremely popular with foreign investors do still have prices that could make them worthwhile.
It is really worth doing your research into the area that you are looking to invest in. Iconic areas such as Marbella on the Costa del Sol have been able to retain their value. But areas only a short distance away are still available at low prices. Doing your research remains a huge part of making a good investment in Spain.
Given that prices are still lower than previous highs and that Spain is attracting huge interest from foreign investors, now really is the perfect time to act. As with any investment, it is still essential to really understand the property you are interested in and to consider the lifespan of the investment. But as Spain emerges from the coronavirus pandemic, this is an area with incredible potential.
Mike James is a regular traveller and frequent visitor to Spain, having lived in Andalucia, Valencia & Murcia during his time. First-hand experience of life in Spain as well as a background in finance and property also gives him the opportunity to write for PanoramaMarbella.com, Marbella’s longest running real estate agent.