2016 was a good year for Spain’s property market, with reports indicating there was a 15% increase in property transactions in 2016 over those of 2015. Real estate forecasts have predicted a continued healthy growth over the year 2017. After the 2008 financial crisis drove property prices to rock bottom in Spain, there was nowhere to go but up. The Spanish property market crash officially ended mid-2014, after which the market has experienced 10 consecutive quarters of steady growth. At this point for Spain, there’s no looking back.
International interest in Spanish property remains high for both those who are relocating as well as those looking for holiday homes. Indeed, one in five homes is purchased by a foreigner with British nationals ranking as the top buyers in Spain. While there was some concern that the Brexit vote and the decreasing value of the pound would lessen interest from the UK, this is not the case as Spanish property is still in high demand from UK buyers. In addition, as UK property prices continue to increase, many British retirees are starting to sell and move to Spain where their saved earnings can purchase better properties.
Aside from the Brits, non-European buyers are also to thank for the growing Spanish property market. Spain’s Golden Visa Program was introduced in 2013 in an effort to help boost the country’s waning economy. In return for an investment in Spain, foreign nationals obtain a temporary resident visa for one year, renewable for two-year periods thereafter. This temporary visa can lead to permanent residency after five years, and citizenship after ten. Investors through this program have helped carry Spain out of its economic slump post-financial crisis.
While there are many investment options available through Spain’s Golden Visa Program, the property investment option is always the most preferred by investors around the world. First, the minimum investment price is only EUR 500,000 compared to the EUR 1 million plus requirement of other available options. Second, with the Spanish property market forecasts continuing to look up, savvy investors with an appetite for risk are buying properties at low prices now to be able to make sizeable capital gains on future resale.
The minimum property investment must be EUR 500,000 excluding tax and other conditions in order to qualify. Mortgages (financing) may be obtained on properties purchased above the required value. In other words, if an investor has his or her eyes set on a EUR 750,000 property, a mortgage can be obtained on the excess amount of EUR 250,000. The minimum EUR 500,000 value can be spread out over multiple properties if desired.
Where to buy
The top three areas in Spain for property investors in 2017 are likely cities in which the prices remain very low, as people are always in search of a bargain. Property prices are starting to increase beyond the big cities of Barcelona and Madrid, so this year might be the opportune time for investors to enter the market.
Almeria, situated in the southeast of Spain on the Mediterranean Sea, is one of the last coastal cities that has held onto Spanish roots and possibly the last coastal section where you can still have the beach to yourself. Along the rest of the coast, resorts have cropped up losing the authenticity of Spain. Although sales continue to increase in Almeria year after year, prices are still very affordable with the average property price being around EUR 130,000.
Alicante continues to attract foreign investors each year due to property prices being cheaper than most other areas of Spain, with the average around EUR 120,000. The property market in the port city of Alicante is very dependent on international investors, being a very tourist-centred area. Property prices are projected to increase here over at least the next five years.
Tenerife, the largest of Spain’s Canary Islands, has a property market increasing alongside Spain’s national average, with house prices currently at EUR 250,000. With over 10 million visitors to this island each year, renting out property purchased through the Golden Visa Program is a viable option for additional income. Looking beyond the tourists, however, you’ll see that Tenerife is an island of extraordinary diversity. From volcano tours to old colonial towns, tropical forests, and temples, there is never a dull moment for residents of the island.
Benefits of the Golden Visa
Holders of the temporary resident permit through the Golden Visa Program will be granted access throughout Europe’s Schengen zone without visa requirements. Further, they can stay within the Schengen region for a duration of 90 days in every six-month period. Another advantage of the Golden Visa Program is the requirement to only visit Spain for one day during each residency period. There is no obligatory physical residence in the country as with other similar programs.
An investor’s spouse and children under 18 years old can be included in a single application. All visa holders receive the right to live, work, and study anywhere in Spain. In addition, applications are processed very quickly, within two months.
Spain’s housing market has made a remarkable turnaround since 2014 from its former state of despair. Spain’s government established the Golden Visa Program to help pull the country out of recession and toward economic recovery. Foreign investors have fueled the resurgence of the real estate market in Spain; however, with its still ridiculously low real estate prices, profit is the likely outcome. Although growth is steady rather than spectacular, prices will rebound to former highs nonetheless.
The most important aspect of applying to Spain’s Golden Visa Program is finding the right property to suit your needs. Will it be a vacation home or a permanent residence? Will it be rented out for supplementary income? Is it located in an area expected to see continued growth in the foreseeable future? Before committing any funds, one must be sure that the selected property is a solid investment. Our office can assist you with every step of your application process, including the property purchase. Allow us the opportunity to guide you to a Spanish Golden Visa while simultaneously investing in a property (or properties) with great future potential. Now is the time to invest. Contact our office today!
For more information on Spain’s Golden Visa Program, please click here.
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